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By Jesus Mesa and Gabe Whisnant
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A Hong Kong-based conglomerate has agreed to sell its stake in key Panama Canal ports to a consortium led by BlackRock Inc., following pressure from President Donald Trump over alleged Chinese influence at the vital waterway.
The deal marks a significant geopolitical shift in the region, reinforcing U.S. control over a strategic maritime passage that facilitates 5 percent of global trade.
Why It Matters
Trump and his supporters have repeatedly criticized the fees ships are charged to use the Panama Canal and alleged that China controls the waterway, a claim denied by Panama's government. Since returning to office, Trump has insisted that China has influence over the canal, vowing to "take it back" if necessary.
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"China is running the Panama Canal that was not given to China, that was given to Panama foolishly, but they violated the agreement, and we're going to take it back, or something very powerful is going to happen," Trump said last month.
Despite these claims, the Panama Canal Authority (ACP) has reaffirmed that the canal remains under Panamanian authority.
Newsweek has reached out to the U.S. State Department via email on Tuesday for comment.
What to Know
Hong Kong-based CK Hutchison announced Tuesday that it is selling its controlling stake in a unit managing Panama's ports to a consortium that includes BlackRock, the world's largest asset management firm.
The deal will transfer a 90 percent stake in Panama Ports Company, which operates the Balboa and Cristobal ports, to the consortium, effectively shifting control of key trade hubs in the South American country.
This move comes as the Trump administration intensifies efforts to limit Chinese influence in the region.
CK Hutchison has managed the ports at the Panama Canal's Pacific and Atlantic entrances for over 20 years. BlackRock's involvement signals a shift of control from a Hong Kong-based company to an American-led consortium, aligning with U.S. strategic efforts to reduce Chinese influence in key global trade hubs.
Although not directly financially linked to the Chinese government, Hong Kong-based companies are still subject to state oversight.
The transaction, which requires approval from Panama's government, does not include any interest in a trust that operates ports in Hong Kong, Shenzhen, South China, or other Chinese ports.
Limiting China influence in Latin America
Since returning to office, the Trump administration has focused on limiting China's growing influence in Panama and Latin America, a region where Beijing has significantly expanded its investments over the past two decades.
In early February, U.S. Secretary of State Marco Rubio visited Panama and warned President José Raúl Mulino that Panama would need to reduce Chinese influence over the canal or risk potential retaliation from the United States.
While Mulino rejected those claims, following Rubio's visit, Panama withdrew from China's Belt and Road Initiative, a global development strategy aimed at building infrastructure like roads, ports, and railways to open new markets. This move drew strong condemnation from Beijing.
While much attention focused on Trump's threat to retake control of the canal, his administration also turned its attention to Hutchison Ports, the Hong Kong-based consortium managing the key ports at either end of the canal. In recent weeks, rumors circulated that a U.S. firm with ties to the White House might be lined up to take over.
What People Are Saying
Frank Sixt, co-managing director of CK Hutchison, said in a statement: "I would like to stress that the transaction is purely commercial in nature and wholly unrelated to recent political news reports concerning the Panama Ports."
Secretary of State Marco Rubio in an interview with Fox News in February: "I am very happy that after our visit – I think the same day I was there – Panama became the first country in Latin America, in the Western Hemisphere, to get out of the Belt and Road Initiative. And I think there'll be more news coming up soon with regards to Panama – all positive for America."
Francisco Santos, former vice-president of Colombia, on X: "Trump's pressure on the Panama Canal issue has already yielded its first result. @POTUS knows where he's headed. The world has changed, whether we like it or not. And he's coming for @NicolasMaduro".
What Happens Next
BlackRock declined to comment outside of a press release touting the deal. Shares in BlackRock fell 1.5 percent in afternoon trading Tuesday.
Update: 3/4/24, 1:56 p.m. ET: This article has been updated with additional information.
Update: 3/4/24, 3:12 p.m. ET: This article has been updated with additional information.
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