US Moves Closer to Controlling Panama Canal as BlackRock-Led Deal Buys Chinese-Held Ports

The United States is one step closer to reclaiming a strategic foothold in the Panama Canal as a BlackRock-led consortium strikes a £17.92 billion ($23 billion) deal to acquire key port operations from Chinese-owned CK Hutchison. The deal, which President Donald Trump hailed as a victory, marks a significant shift in global trade power and has already sparked political controversy.

Inside the BlackRock-Led Takeover

The BlackRock-TiL Consortium and Hong Kong-based CK Hutchison have reached an agreement in principle to transfer control of 43 ports across 23 countries. The deal includes a 90% stake in Panama Ports Company (PPC), which operates the crucial Balboa and Cristóbal ports, as well as an 80% controlling interest in Hutchison Ports Holdings subsidiaries and associated companies. Notably, the agreement excludes CK Hutchison's operations in Hong Kong, Shenzhen, and South China.

The Panama government must approve the deal before it is finalised, and the wider Hutchison acquisition remains subject to regulatory approvals and due diligence. The transaction agreements for PPC are expected to be signed by 2 April 2025.

A 'Commercial' Deal With Political Undertones

Executives from BlackRock, Terminal Investment Limited (TiL), and CK Hutchison have been keen to emphasise that the transaction is purely commercial. BlackRock Chairman Larry Fink described the deal as a 'powerful illustration' of their investment strategy, while GIP Chairman Bayo Ogunlesi highlighted the consortium's 'substantial expertise in owning and operating ports.'

However, the timing and nature of the deal have raised eyebrows. In a recent address to Congress, Trump linked the deal to his administration's broader push to 'reclaim' the Panama Canal, stating:

'My administration will be reclaiming the Panama Canal, and we've already started doing it. Just today, a large American company announced they are buying both ports around the Panama Canal.'

Trump has repeatedly claimed—without evidence—that China exerts control over the Panama Canal and has hinted at possible military action to 'take it back' from Panama, a long-standing US ally in Latin America. The Panama Canal Authority and Beijing have denied any foreign interference, with Chinese Foreign Ministry spokesperson Lin Jian stating:

'China supports Panama's sovereignty over the canal and is committed to maintaining its status as a permanently neutral international waterway.'

Why the Panama Canal Matters

Completed in 1914, the Panama Canal is a vital trade artery linking the Atlantic and Pacific Oceans. It spans 50 miles and drastically reduces shipping times, handling approximately 12,245 vessels per year. In 2021 alone, it generated nearly £2.34 billion ($3 billion) in toll revenue, marking an 11% increase from the previous year.

An American-controlled Panama Canal would revive the historical US oversight from 1914 to 1999, during which the US managed security and operations before transferring control to Panama. While the move could bolster US trade interests, it also risks increasing geopolitical tensions, particularly with China, Panama's second-largest customer.

What's Next?

With Trump openly championing the deal, many expect the Panama government to scrutinise the sale. Panama has the right to reject the agreement, and reports suggest officials may be reassessing the deal's implications. If approved, the acquisition would solidify US influence over a critical global trade route while potentially provoking backlash from China and Panama.

Despite assertions that the transaction is 'purely commercial', it is clear that political forces are shaping the future of the Panama Canal. Whether the US ultimately regains full control remains to be seen, but this deal brings it one step closer to that reality.