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.
BlackRock to Pay $23 Billion
In a filing, CK Hutchison Holding said on Tuesday they 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.
The deal will give the BlackRock consortium control over 43 ports in 23 countries, including the ports of Balboa and Cristobal in Panama, as well as others in Mexico, the Netherlands, Egypt, Australia, Pakistan and elsewhere.
The transaction, which the Panama’s government must approve, does not include any interest in a trust that operates ports in Hong Kong, Shenzhen and South China, or any other ports in China.
U.S-China Trade War.
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.
Furthermore in January, U.S. Sen. Ted Cruz, the Republican chair of the Senate Committee on Commerce, Science and Transportation, raised concerns that China could exploit or block passage through the canal and that the ports “give China ready observation posts” to take action. “This situation, I believe, posts acute risks for U.S. national security,” Cruz said in an interview.
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. However, Mulino rejected the idea that China had any control over canal operations.
Historical Facts Of Panama Canal.
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. Washington relinquished control of the waterway to Panama on Dec. 31, 1999, under a treaty signed in 1977 by President Jimmy Carter. Since its handover in 1999 the canal itself has been operated by Panama, not the Chinese, despite Trump’s stated concern.
The 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.
