BlackRock has agreed to purchase two ports at the Panama Canal from CK Hutchison for $22.8 billion, addressing concerns raised by President Trump regarding Chinese ownership. The deal enhances BlackRock’s portfolio and reassures U.S. interests in the canal’s control. Additionally, the acquisition may influence ongoing negotiations over fees for American vessels transiting the canal.
American asset management firm BlackRock has reached an agreement to purchase two ports at each end of the Panama Canal from CK Hutchison, a company based in Hong Kong. This acquisition, valued at $22.8 billion, has drawn attention due to previous concerns raised by then-President Donald Trump regarding Chinese ownership of port operations. Trump repeatedly mentioned his desire to”take back” the canal after its control was handed to Panama in 1999.
During his inaugural address, President Trump emphasized that, “China is operating the Panama Canal,” highlighting his view that the United States had relinquished control. At a January press conference, he did not dismiss the possibility of using military force or economic pressure to regain control of the canal if necessary. The transaction with BlackRock includes the purchase of other global port interests, though it notably excludes ports in China or Hong Kong.
BlackRock is one of the largest asset management firms globally, possessing assets worth approximately $11.6 trillion, representing about 40% of the United States’ gross domestic product. Although BlackRock does not directly manage a large number of companies, it holds significant stakes in major firms including Walmart, Apple, Amazon, Microsoft, and Alphabet, Google’s parent company.
CK Hutchison, a flagship company of billionaire Li Ka-shing, anticipates over $19 billion in cash proceeds from this sale, resulting in a notable increase in share value of over 20% following the announcement. Constructed by the United States in the early 20th century and completed in 1914, the Panama Canal was operated by the U.S. until its transfer to Panama under a treaty negotiated in the Carter Administration.
Being a crucial trade route, the Panama Canal handles around 4% of global maritime trade and over 40% of U.S. container traffic, contributing significantly to Panama’s economy. As reported in 2024, the canal generated nearly $5 billion in profits, with approximately 24% of Panama’s annual income derived from canal-related services. Despite Trump’s assertions, the canal has been under Panamanian operation since its handover, not Chinese control.
The White House has not yet commented on this acquisition, although it may reduce concerns regarding Chinese influence. National Security Adviser Mike Waltz indicated that Panama had engaged in negotiations to address port-related issues. Trump’s conditions also include demands for Panama to eliminate fees imposed on American vessels transiting the canal, a point emphasized by Secretary of State Marco Rubio during his visit to Panama, where he described the fees as “absurd” given the U.S. obligation to protect the canal in times of conflict.
In summary, BlackRock’s acquisition of the ports at the Panama Canal highlights ongoing geopolitical concerns, particularly those expressed by President Trump regarding Chinese influence in the region. The deal is set to bolster BlackRock’s extensive portfolio while reaffirming the strategic significance of the Panama Canal for international trade and U.S. interests. The administration’s negotiations with Panama regarding U.S. vessel fees further underscore the complexities surrounding the management of this vital waterway.
Original Source: 6abc.com
