Two ports at Panama Canal, owned by Hong Kong firm CK Hutchinson Holdings, are set to be sold to American asset management firm BlackRock, following Trump’s threats to “retake” the Panama Canal amid his claims it was being run by China.
The US president made the false claims of Chinese operation of the canal in his inauguration speech in January, and since then he has escalated pressure on the Panama Canal Authority (ACP) to cut ties with Chinese businesses and alleged ties with China.
Panama has owned and operated the canal through the Panama Canal Authority since 1999 when the US handed over control as part of the Panama Canal Treaty. Hong Kong parent company CK Hutchinson Holdings owns the two ports – Balboa and Cristobal – through its Panama Ports Company division. In response to Trump’s allegations, the Panamanian authorities previously announced an audit of Panama Ports Company.
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Now, the $22.8 billion deal for the ports by asset management giant BlackRock and a consortium of investors has been agreed in principle. The BlackRock consortium is also buying CK Hutchinson Holdings’ controlling interest in 43 other ports across 23 countries.
Following the announcement of the deal, Trump told the US Congress: “My administration will be reclaiming the Panama Canal, and we’ve already started doing it.”
However, Panamanian president Jose Raul Mulino has once again denied Trump’s claims. In a post on social media, the president said: “The Panama Canal is not in the process of being reclaimed … the canal is Panamanian and will continue to be Panamanian!”
Tensions about the globally important waterway may continue between Panama and the US, as Trump’s administration has also demanded Panama stop charging fees to American vessels. Any disruption of trade through the canal would have implications on the global supply chain and would be felt heavily by the automotive supply chain, not just in North America but globally.
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