The Panama Canal could soon be back in the control of the U.S., after a Hong Kong-based conglomerate agreed to sell its controlling stake in a subsidiary that operates ports near the canal to a consortium that includes BlackRock Inc.
According to the Associated Press, the business move would put the ports under the control of the U.S. In a filing, CK Hutchinson said Tuesday that it would be selling shares in Hutchinson Port Holdings and Hutchinson Port Group Holdings for almost $23 billion which include roughly $5 billion worth of debt.
BlackRock would be given control of 43 ports in 23 countries, which includes Balboa and Cristobal ports in Panama, ports in Mexico, the Netherlands, Egypt, Australia, Pakistan, and other countries. The deal must, however, first get the approval of Panama’s government and ports that operate in Hong Kong or China are exempt.
The AP reported that around 70% of all sea traffic that passes through the Panama Canal is either coming or going from U.S. ports. Trump has publicly alleged that China is in control of the canal, which was handed over to the Panama government in 1999.
U.S. Sen. Ted Cruz (R-Texas) who serves as the chair of the Senate Committee on Commerce, Science and Transportation, has raised his own concerns around Chinese control of the waterway, stating the communist country could block passage through the canal, and noted the ports could “give China ready observation posts,” and pointed out that “this situation, I believe, posts acute risks for U.S. national security.”
In early February, U.S. Secretary of State Marco Rubio made a visit to Panama, and advised President Jose Raul Mulino that his country would need to reduce China’s influence, or the U.S. could take retaliatory steps. Panama denied they were influenced by China, pulling out of the world’s second largest economy’s Belt and Road Initiative after Rubio’s visit, which was quickly condemned by China.
