Trump was touting his Panama victory. Then China stepped in.

HONG KONG — A huge deal touted by President Donald Trump as a victory in his campaign to “take back” the Panama Canal from China could be on the rocks amid pushback from Beijing.

The $23 billion sale involving two ports run by CK Hutchison, a private company based in the Chinese territory of Hong Kong, to a consortium led by U.S. investment firm BlackRock had originally been scheduled to be signed last week. 

But an agreement between the two has been delayed under pressure from China, whose market regulator launched a review of the deal as state-run newspapers attacked it as undermining China’s national interests.

NBC News takes a look at the sale and what it may mean politically and economically for the United States and China, the world’s two biggest economies.

Why is it important?

During Trump’s inaugural speech in January, he claimed without providing evidence that China controlled the 50-mile canal, and vowed that the U.S. will take back the waterway, which he said was “vital” to national security. The Panamanian government has administered the U.S.-built canal since the U.S. relinquished it to the Central American country in 1999. 

Trump did not rule out military action and has directed the Defense Department to draw up plans to send more troops to Panama to “reclaim” the canal, through which 40% of U.S. trade passes.

Panama denies Trump’s accusations about the neutrality of the canal, which is enshrined in its constitution. But in an attempt to relieve the pressure from Washington, in January the country launched an audit of CK Hutchison’s Panama Ports Company (PPC), which since 1997 has operated two ports along the canal, Balboa on the Pacific side and Cristóbal on the Atlantic side.

On Monday, Panama’s comptroller general said the audit had found that the contract was overly favorable to Hutchison PPC, costing Panama $1.3 billion in revenue, and that authorities would file a lawsuit against officials involved in its renewal in 2021.

The findings come as CK Hutchison is negotiating the sale to BlackRock, which includes a 90% interest in the two Panama Canal ports and an 80% controlling interest in 43 other ports outside Hong Kong and China. When the deal was announced on March 4, the companies said that definitive documentation for the Panama Canal operations would be signed by April 2.

Trump quickly declared victory. “To further enhance our national security, my administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he said in an address to Congress last month, citing the proposed deal.

China’s ‘long-arm’ jurisdiction

The sale of the two Chinese-run ports is about more than just Panama, said Christopher Hernandez-Roy, senior fellow and deputy director of the Americas Program at the Center for Strategic and International Studies, a Washington-based think tank.

“It represents a major victory for the Trump administration’s efforts to roll back China in the Western Hemisphere,” he said, adding that is something China “would not want to happen.”

Though CK Hutchison, owned by billionaire Li Ka-shing, is a private company based in Hong Kong, a semiautonomous territory, Beijing quickly signaled its displeasure with the deal.

China “firmly opposes using economic coercion and bullying to harm other countries’ legitimate rights and interests,” Chinese Foreign Ministry spokesperson Guo Jiakun said last week.

Chinese government offices in Hong Kong have reposted articles from pro-Beijing newspapers criticizing the sale as undermining China’s national interest. Beijing’s market regulator has also said the sale is subject to an antitrust review “to protect fair market competition and safeguard public interests.” 

The original signing date of April 2 came and went last week.