Hong Kong-Based Company Agrees to Sell Stake in Panama Canal to BlackRock Amid Trump Pressure

What Happened?

A Hong Kong-based company has agreed to sell control of a unit that operates ports near the Panama Canal to U.S. company BlackRock.

Conglomerate CK Hutchison Holdings announced plans Tuesday for investors to buy an 80% stake in the business Hutchison Ports group for an equity value of $14.21 billion.

BlackRock Inc. and its global partners will also acquire 90% of Panama Ports Co., which operates the two entryways in Balboa and Cristobal.

This comes after pressure from President Donald Trump to limit what he views as Chinese influence over the region, according to reports.

Trump vowed during statements in February to 'take back' the canal.

CK Hutchison insisted, however, that the deal being conducted was unrelated to Trump’s expressed views surrounding the canal.

'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,' stated co-managing director Frank Sixt.

The White House did not have an immediate comment on the purchase.

Why it Matters

The announcement comes at the heels of the Trump administration's recent implementation of tariffs on top trading partners such as China and Mexico.

Hong Kong-based company Hutchison Ports has reportedly managed the ports at either end of the canal since 1997 under concessions from Panama’s government.

There has been no interest shared by Panamanian President José Raúl Mulino in putting the canal back under previous U.S. control.

'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,' Trump stated during his January inaugural address.

This move somewhat ensures a better position for Trump as his eyes are set on regaining U.S. control.

Trump’s expressed demands surrounding Panama have reportedly included the halt of fees being charged to American vessels.

Secretary of State Marco Rubio has found the matter of paying fees 'absurd' considering the U.S. obligation to protect the canal if it came under attack.

The 51-mile canal is a key to both the U.S. military vessels and the movement of international trade.

The U.S. is reportedly the canal's largest user, with about 70% of shipping traffic only in front of China.

How it Affects You

The Panama Canal Authority (ACP) has reaffirmed that the canal remains under Panamanian authority.

But there is a growing focus under the Trump administration to reclaim the once U.S.-controlled passage.

Impacts surrounding international trade could soon be affected in a major way.