Within three months, came the announcement that a BlackRock-led consortium had agreed to acquire the Balboa and Cristóbal ports located at either end of the canal from Hong Kong’s CK Hutchison for US$22.8 billion, a deal that also encompasses a controlling stake in 43 ports across 23 countries. The transaction will place the Panama Canal gateway ports, handling 5% of global trade, back under American ownership.
On the surface, the deal appears to have been agreed with unbelievable speed, but dig a little deeper and it becomes evident that tensions remain as political pressure against the deal grows.
Earlier this week, CK Hutchinson announced that it would not hold an earnings call for investors in a move described by one analyst as, “very rare for a blue-chip company”. It follows reports last week from Chinese state media that criticised the deal as a betrayal of China which neglected national interests in favour of “profit-seeking”.
These latest developments are another chapter in the long and colourful history of the canal. In 1881, Frenchman Ferdinand de Lesseps, riding his success of overseeing the construction of the Suez Canal, began work in Panama, only to be defeated by malaria, yellow fever, an unforgiving terrain and bribery scandals. Over 20,000 workers perished before the project folded in 1889. The United States stepped in after 1904, engineering Panama’s split from Colombia and completing the canal in 1914 at a cost of US$375 million and roughly 5,600 lives, mostly Caribbean laborers.
The engineering marvel slashed shipping times and galvanised global trade until Panama took full control in 1999 under the Torrijos-Carter Treaties. CK Hutchison, a conglomerate controlled by Hong Kong’s richest man, the 96 year old billionaire Li Ka-shing, and his son Victor Li, have managed Balboa and Cristóbal for nearly three decades, a tenure Trump has branded as Chinese encroachment, despite Panama’s sovereign oversight.
Trump’s fixation on the canal surfaced shortly before his January 20 inauguration. On December 22, 2024, in Arizona, he vowed to seize the canal, decrying “ridiculous, highly unfair” charges and calling it “a complete rip-off of our country.”
President Mulino of Panama fired back on X that day: “Every square meter of the Panama Canal and its surrounding area belongs to Panama and will remain ours,” framing Trump’s stance as an insult to a hard-fought legacy.
In his inaugural address, Trump doubled down by stating: “We’ve been treated very badly by this foolish gift that should never have been given. We’re taking it back.” Mulino countered on X: “I fully reject President Trump’s statements. The canal wasn’t a concession—it was won through generational struggle, culminating in 1999.” The heated exchanges between the two Presidents seemed to suggest that the United States and Panama had differences of opinion about the canal that were unreconcilable.
However, the new US administration acted swiftly. On January 23, three days after Trump’s inauguration, Secretary of State Marco Rubio arrived in Panama, pressing Mulino on China’s purported control of the canal and signalling repercussions for inaction. On February 3, Mulino announced Panama would not renew its 2017 commitment to the Chinese Belt and Road Initiative, making it the first Latin American nation to join and then abandon China’s ambitious infrastructure network.
Rubio hailed the development as “a great step forward” for U.S.-Panama ties.
Then came the blockbuster port deal. Trump told Congress on March 4: “A major American company has acquired the ports at both ends of the Panama Canal, plus dozens more worldwide. It’s a great day for America.”
BlackRock CEO Larry Fink highlighted the commercial upside: “These world-class ports drive global growth. We’re excited for our clients to benefit.”
CK Hutchison’s Frank Sixt downplayed the political manoeuvrings, stating: “This was a purely commercial transaction, unrelated to recent political reports.”
Mulino noted on March 6: “This wasn’t part of my talks with Rubio or anyone.”
The US$22.8 billion deal’s scope is vast, covering Hutchison’s 80% stake in its global ports business—43 facilities spanning Mexico, the Netherlands, Egypt and beyond, plus a 90% stake in the Panama Ports Company, which operates Balboa and Cristóbal. The US$19 billion cash figure reflects what Hutchison nets after debt and minority interests. Executed with quiet precision, the sale stemmed from intense pressure.
Trump’s threats of tariffs and military action clearly rattled Hutchison which is heavily reliant on Western markets. Acceptance of BlackRock’s offer, which was widely considered to be generously above market, avoided potential US sanctions and other reprisals against the company and its interests that could have had serious negative consequences.
On Tuesday, however, Bloomberg reported that Chinese government agencies, including its top market regulator, were probing the deal for any potential security breaches or antitrust violations.
Even with the port sale agreed upon, albeit subject to potential legal and political challenges, Trump remains undeterred in his push for greater control over the canal.
On March 12, he told Fox News: “We’ve got the ports, but the canal isn’t fully ours yet—we should have a say.”
Reports indicate that Trump has directed US Southern Command to prepare military options ranging from bolstering security cooperation to potentially seizing the canal. Defence Secretary Pete Hegseth’s upcoming visit to Panama scheduled for April underscores the escalation and signals that the Trump Administration views the canal’s strategic value as non-negotiable regardless of the outcome of the port sale.
Lawyer and writer Philip Crump explores political, legal and cultural issues facing New Zealand. Sometimes known as Thomas Cranmer. This article was published HERE
On the surface, the deal appears to have been agreed with unbelievable speed, but dig a little deeper and it becomes evident that tensions remain as political pressure against the deal grows.
Earlier this week, CK Hutchinson announced that it would not hold an earnings call for investors in a move described by one analyst as, “very rare for a blue-chip company”. It follows reports last week from Chinese state media that criticised the deal as a betrayal of China which neglected national interests in favour of “profit-seeking”.
These latest developments are another chapter in the long and colourful history of the canal. In 1881, Frenchman Ferdinand de Lesseps, riding his success of overseeing the construction of the Suez Canal, began work in Panama, only to be defeated by malaria, yellow fever, an unforgiving terrain and bribery scandals. Over 20,000 workers perished before the project folded in 1889. The United States stepped in after 1904, engineering Panama’s split from Colombia and completing the canal in 1914 at a cost of US$375 million and roughly 5,600 lives, mostly Caribbean laborers.
The engineering marvel slashed shipping times and galvanised global trade until Panama took full control in 1999 under the Torrijos-Carter Treaties. CK Hutchison, a conglomerate controlled by Hong Kong’s richest man, the 96 year old billionaire Li Ka-shing, and his son Victor Li, have managed Balboa and Cristóbal for nearly three decades, a tenure Trump has branded as Chinese encroachment, despite Panama’s sovereign oversight.
Trump’s fixation on the canal surfaced shortly before his January 20 inauguration. On December 22, 2024, in Arizona, he vowed to seize the canal, decrying “ridiculous, highly unfair” charges and calling it “a complete rip-off of our country.”
President Mulino of Panama fired back on X that day: “Every square meter of the Panama Canal and its surrounding area belongs to Panama and will remain ours,” framing Trump’s stance as an insult to a hard-fought legacy.
In his inaugural address, Trump doubled down by stating: “We’ve been treated very badly by this foolish gift that should never have been given. We’re taking it back.” Mulino countered on X: “I fully reject President Trump’s statements. The canal wasn’t a concession—it was won through generational struggle, culminating in 1999.” The heated exchanges between the two Presidents seemed to suggest that the United States and Panama had differences of opinion about the canal that were unreconcilable.
However, the new US administration acted swiftly. On January 23, three days after Trump’s inauguration, Secretary of State Marco Rubio arrived in Panama, pressing Mulino on China’s purported control of the canal and signalling repercussions for inaction. On February 3, Mulino announced Panama would not renew its 2017 commitment to the Chinese Belt and Road Initiative, making it the first Latin American nation to join and then abandon China’s ambitious infrastructure network.
Rubio hailed the development as “a great step forward” for U.S.-Panama ties.
Then came the blockbuster port deal. Trump told Congress on March 4: “A major American company has acquired the ports at both ends of the Panama Canal, plus dozens more worldwide. It’s a great day for America.”
BlackRock CEO Larry Fink highlighted the commercial upside: “These world-class ports drive global growth. We’re excited for our clients to benefit.”
CK Hutchison’s Frank Sixt downplayed the political manoeuvrings, stating: “This was a purely commercial transaction, unrelated to recent political reports.”
Mulino noted on March 6: “This wasn’t part of my talks with Rubio or anyone.”
The US$22.8 billion deal’s scope is vast, covering Hutchison’s 80% stake in its global ports business—43 facilities spanning Mexico, the Netherlands, Egypt and beyond, plus a 90% stake in the Panama Ports Company, which operates Balboa and Cristóbal. The US$19 billion cash figure reflects what Hutchison nets after debt and minority interests. Executed with quiet precision, the sale stemmed from intense pressure.
Trump’s threats of tariffs and military action clearly rattled Hutchison which is heavily reliant on Western markets. Acceptance of BlackRock’s offer, which was widely considered to be generously above market, avoided potential US sanctions and other reprisals against the company and its interests that could have had serious negative consequences.
On Tuesday, however, Bloomberg reported that Chinese government agencies, including its top market regulator, were probing the deal for any potential security breaches or antitrust violations.
Even with the port sale agreed upon, albeit subject to potential legal and political challenges, Trump remains undeterred in his push for greater control over the canal.
On March 12, he told Fox News: “We’ve got the ports, but the canal isn’t fully ours yet—we should have a say.”
Reports indicate that Trump has directed US Southern Command to prepare military options ranging from bolstering security cooperation to potentially seizing the canal. Defence Secretary Pete Hegseth’s upcoming visit to Panama scheduled for April underscores the escalation and signals that the Trump Administration views the canal’s strategic value as non-negotiable regardless of the outcome of the port sale.
Lawyer and writer Philip Crump explores political, legal and cultural issues facing New Zealand. Sometimes known as Thomas Cranmer. This article was published HERE
1 comment:
So, in reality the purchase of the two Panamanian ports was just a small part of a much wider deal that involved BlackRock acquiring "43 facilities spanning Mexico, the Netherlands, Egypt and beyond ..." As usual Trump is claiming credit for something that was going to happen anyway and was probably in train for months before he even came to power. But I guess it makes him feel good to be able to threaten military force against a country that doesn't actually have a real army. And doing what makes Trump feel good is what passes for US policy these days. By the way, Port Darwin is now run by a Chinese company under a 99 year lease. I"m guessing that will make Australia a sitting duck for Trumpian rage when he decides his navy may have difficulty accessing Port facilities when the Taiwan war starts. So should we care? Well yes, because that pesky anti-nuclear policy of ours will deny the US navy access to our ports, and we all know what happened when that was last tested.
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