Trump Praises BlackRock for Returning the Panama Canal, Panama Rejects Trump’s ‘Lies’

U.S. President Donald Trump welcomed the deal led by the American company BlackRock to purchase the majority of the $22.8 billion port business of the Hong Kong conglomerate CK Hutchison in the Panama Canal, while Panama again dismissed his statements as lies.

The agreement will give the American consortium control over key ports of the Panama Canal following a White House call to remove them from ‘Chinese ownership’.

However, it also risks increasing tensions between the U.S. and Panama, which have clashed over Trump’s statements regarding the canal.

– My administration will return the Panama Canal, and we have already begun to do so. Just today, a major American company announced that it is buying both ports around the Panama Canal and many other things related to the Panama Canal and several other canals – Trump told the U.S. Congress on Tuesday evening.

Panamanian President Jose Raul Mulino stated that Trump ‘is lying once again’ in a post on X on Wednesday.

– The Panama Canal is not in the process of being returned… the canal is Panamanian and will remain Panamanian! – he wrote.

The deal with the consortium led by BlackRock encompasses 90 percent of the Panama Ports Company, which has managed the Balboa and Cristobal ports at both ends of the canal for over two decades, CK Hutchison announced.

CK Hutchison is a Hong Kong company that is not financially connected to the Chinese government. The CK Hutchison conglomerate, controlled by billionaire Li Ka-shing, has interests ranging from infrastructure and retail to telecommunications, in addition to being the largest privately-owned port operator in the world.

– We are pleased that American investors are acquiring a controlling stake in Panama Ports Company, which owns and operates the Balboa and Cristobal ports at both ends of the Panama Canal – said a U.S. State Department official in a statement to Reuters.

Other ports in Panama are managed by companies from the U.S., Taiwan, and Singapore.

Trump has previously complained about the presence of Chinese and Hong Kong companies in Panama, and U.S. officials and politicians have stated that CK Hutchison’s control of the ports poses a security risk.

The high price led to a more than 20% increase in CK Hutchison’s shares on Wednesday, surpassing the 2.8% rise of the Hong Kong Hang Seng index.

CK Hutchison’s share price is now the highest since August 1, 2023.

The sale includes 80 percent of CK Hutchison’s stake in Hutchison Ports with an ownership value of $14.21 billion. The Hong Kong conglomerate will receive more than $19 billion after repaying shareholder loans. Goldman Sachs advised CK Hutchison on this deal, two sources familiar with the transaction said.

John Waldron, President of Goldman Sachs, was among the bankers involved in the negotiations due to the high-profile nature of the transaction, a third person familiar with the negotiations told Reuters.

Goldman bankers in Hong Kong were also involved, the source said.

The remainder of Hutchison Ports is owned by Singapore’s PSA International.

About 12,000 ships used the Panama Canal last year, connecting 1,920 ports in 170 countries.

Its position is strategic for the U.S. as more than three-quarters of the ships passing through originate from or are traveling to the United States.

– I would like to emphasize that the transaction is purely commercial in nature and completely unrelated to recent political media reports concerning the Panamanian ports – said Frank Sixt, one of CK Hutchison’s directors, in a statement.

JPMorgan stated in a report that the sale of the Panama business is ‘understandable’, but the deal is still a ‘surprise’ given that most other CK Hutchison ports are not in regions directly exposed to Chinese-American geopolitical tensions.

Hong Kong returned from British to Chinese rule in 1997 with a guarantee that its freedoms, including freedom of speech, would be protected under the ‘one country, two systems’ formula. The U.S. controlled the canal and the area around it until it signed treaties in 1977 that granted Panama control and sovereignty over the canal zone and guaranteed its permanent neutrality. The treaties came into effect in 1999. American involvement in the canal has long been seen as a sore point for many Panamanians, with about twenty protesters killed in clashes with canal administration in 1964.