Wedoany.com Report-Mar 6, Somewhat overshadowed by yesterday’s busy day of tariff news, the Associated Press’ Didi Tang and Alex Veiga reported that “a Hong Kong-based conglomerate has agreed to sell its controlling stake in a subsidiary that operates ports near the Panama Canal to a consortium including BlackRock Inc., effectively putting the ports under American control after President Donald Trump alleged Chinese interference with the operations of the critical shipping lane.”
Ship transiting the Panama Canal.
“In a filing, CK Hutchison Holding said Tuesday that it would sell all shares in Hutchison Port Holdings and in Hutchison Port Group Holdings to the consortium in a deal valued at nearly $23 billion, including $5 billion in debt,” Tang and Veiga reported. “The deal will give the BlackRock consortium control over 43 ports in 23 countries, including the ports of Balboa and Cristobal, located at either end of the Panama Canal. Other ports are in Mexico, the Netherlands, Egypt, Australia, Pakistan and elsewhere. The transaction, which must be approved by Panama’s government, does not include any interest in a trust that operates ports in Hong Kong, Shenzhen and South China, or any other ports in China.”
Reuters’ Clare Jim and Scott Murdoch reported that “U.S. President Donald Trump has hailed a deal led by U.S. firm BlackRock to buy most of the $22.8 billion ports business of Hong Kong conglomerate CK Hutchison which includes assets along the Panama Canal.”
“‘My administration will be reclaiming the Panama Canal, and we’ve already started doing it,’ Trump told the U.S. Congress,” according to Jim and Murdoch’s reporting. “‘Just today, a large American company announced they are buying both ports around the Panama Canal and lots of other things having to do with the Panama Canal and a couple of other canals.'”
Tang and Veiga reported that “Frank Sixt, co-managing director of CK Hutchison, said in a statement that the transaction was ‘the result of a rapid, discrete but competitive process in which numerous bids and expressions of interest were received.’ ‘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,’ Sixt said.”
Canal of Extreme Importance to U.S. Ag Shipping
Farm News Media’s Dennis Rudat reported in January 2024 that “representing 14% of all U.S. maritime trade, 72% of all the cargo transiting the Panama Canal is either coming from or going to the U.S., including a substantial portion of U.S. agricultural exports, according to (American Farm Bureau Federation Economist Betty) Resnick.”
“‘So, the Panama Canal is really a critical choke point for U.S. agriculture and U.S. economy in general,’ Resnick said, with 18% of corn exports, 32% of soybean exports and over 90% of sorghum exports moving through the shipping canal,” Rudat reported.
Axios’ Ben Berkowitz reported that globally, “about 2.5% of all global maritime trade passes through the canal. … About 10,000 ships a year transit the canal, though in recent times severe drought has limited capacity and helped push transit rates higher.”
Trump Administration Has Been Focused on Canal For Months
“Some 70% of the sea traffic that crosses the Panama Canal leaves or goes to U.S. ports. The United States built the canal in the early 1900s as it looked for ways to facilitate the transit of commercial and military vessels between its coasts,” Tang and Veiga reported. “Washington relinquished control of the waterway to Panama on Dec. 31, 1999, under a treaty signed in 1977 by President Jimmy Carter. Trump has claimed that Carter ‘foolishly’ gave the canal away.”
“Trump and his supporters have also complained about the fees that ships are charged to use the waterway and alleged that China has been operating the canal, an assertion denied by Panama’s government,” Tang and Veiga reported. “…U.S. Secretary of State Marco Rubio visited Panama in early February and told President José Raúl Mulino that Panama had to reduce Chinese influence over the canal or face potential retaliation from the United States. Mulino rejected the idea that China had any control over canal operations.”
“But while much attention was focused on Trump’s threat to retake control of the canal, his administration trained its sights on Hutchison Ports, the Hong Kong-based consortium that manages the ports key ports at either end of the canal,” Tang and Veiga reported.
