A Hong Kong-based company has agreed to sell most of its stake in two key ports on the Panama Canal. A group led by US investment firm BlackRock will take control of the facilities.
The decision comes after Donald Trump repeatedly claimed that China controls the canal. He insisted that the US should regain authority over the major shipping route.
Key Details of the Deal
CK Hutchison Holdings, which operates ports at both the Atlantic and Pacific entrances, announced the sale on Tuesday. The deal, worth $22.8 billion (£17.8 billion), also includes 43 ports in 23 countries. However, the agreement still requires approval from the Panamanian government.
CK Hutchison’s Role and Background
Although Hong Kong billionaire Li Ka-shing founded CK Hutchison, the company is not owned by the Chinese government. However, since it is based in Hong Kong, it follows Chinese financial laws. The firm has managed the Panama Canal ports since 1997.
Panama Canal’s Strategic Importance
The Panama Canal, stretching 51 miles (82 km), links the Atlantic and Pacific Oceans. It serves as a crucial global trade route, with nearly 14,000 ships passing through annually. These vessels transport goods such as cars, natural gas, and military cargo.
US-Panama Relations and Trump’s Concerns
The United States initially built the canal in the early 1900s and controlled it until 1977. Gradually, treaties transferred authority back to Panama. In 1999, Panama assumed full control after a period of joint administration.
Trump, however, has repeatedly pushed for the US to take control again. He argues that Chinese influence poses a national security threat. Furthermore, he claims that American investment in the canal’s construction justifies a takeover. He also complains that US ships pay excessive fees to use the waterway.
US Pressure on Panama
In February, US Secretary of State Marco Rubio visited Panama. He demanded that the country take “immediate changes” to limit China’s influence over the canal.
However, Panama firmly rejected these claims. President Jose Raul Mulino responded by stating that the canal “is and will remain” under Panama’s control.
CK Hutchison Insists Sale is Not Political
Meanwhile, CK Hutchison co-managing director Frank Sixt clarified the purpose of the sale. He stated, “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.”
BlackRock and Other Buyers
BlackRock, one of the world’s largest asset management firms, is leading the purchase. Additionally, Swiss-based Terminal Investment Limited is part of the buying group.
