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Where exactly you are getting the error, host1 or host2? Is FTP configured on new machine?
Are you able to do the telnet to external host on port 22? Timeout issue occur when AFT is unable to reach host2 on specified port.
Do you have any additional details? How were you connecting to sftp successfully from the 2016 node? Are you using an sftp client? Is there a firewall that could be blocking the AFT client?
Can you post the logs from PROCLOG\ctmaft.log of the host. You may need to increase the debug level & recreate the issue.