In This Article:
American asset management giant BlackRock has agreed to buy two ports at either end of the Panama Canal from a Hong Kong-based firm whose ownership had angered President Donald Trump.
Trump said several times during the lead-up to his inauguration and since taking office that he intends to “take back” the Panama Canal from Panama, which took over control of the crucial international waterway in 1999 under a treaty negotiated with the United States 20 years earlier. And he cited Chinese ownership of some of the port operations as a sign that China is now running the canal.
“China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back,” said Trump during his inaugural address. At a January press conference ahead of his inauguration, Trump would not rule out using either military force or economic coercion to take control of the canal once again.
The deal announced Tuesday called for BlackRock and a consortium of fellow investors to spend $22.8 billion to buy the ports of Balboa and Cristobal on either end of the canal from CK Hutchison, a Hong Kong company. It said the deal is an “agreement in principle.” BlackRock’s consortium is also buying CK Hutchison’s controlling interest in 43 other ports comprising 199 berths in 23 countries, but none of the ports it operates in China or Hong Kong.
“These world-class ports facilitate global growth,” said a statement from BlackRock CEO Larry Fink. “Through our deep connectivity to organizations like Hutchison … and governments around the world, we are increasingly the first call for partners seeking patient, long-term capital. We are thrilled our clients can participate in this investment.”
BlackRock is one of the world’s largest asset managers, with an enormous pool of $11.6 trillion in assets. For context, that sum equal is to about 40% of the United States’ gross domestic product, the broadest measure of a nation’s economic activity. Unlike some conglomerates, its doesn’t completely control a large number of high profile companies. But among its holdings, it owns the second largest stake in some of the nation’s largest and most successful companies, including Walmart, Apple, Amazon, Microsoft and Google owner Alphabet.
The Panama Canal was constructed by the United States in the early years of the 20th century and was completed in 1914. For most of that century it was operated by the United States, before the Carter Administration negotiated its handover to Panama in a controversial treaty opposed by many Republicans at the time.