By Patti Domm

The sale this week of two Panamanian ports from a Chinese company to a U.S. consortium is a victory for President Donald Trump, but it only appears to have whet his appetite for more concessions from Panama's government.

Investment manager BlackRock announced Tuesday it and two partners would buy the ports as part of a $22.8 billion deal with Hong Kong-based CK Hutchison for dozens of ports around the world.

The Trump administration is concerned about Chinese investment in strategic infrastructure globally, particularly in Latin America. The port deal addresses those concerns and removes a point of contention with Panama -- the potential for a Chinese security threat in the Panama Canal.

"I think it's a plus for [Trump]," said Eric Farnsworth, who leads the Washington office for the Council of Americas, a think tank focused on the region. Trump's interest in the canal "is leading to people questioning whether they want companies linked to China engaging in such direct activities in their country," he said.

With the port issue resolved, strategists expect that the Trump administration will try to cut a deal for free passage of U.S. military ships through the canal.

The president said in his address to Congress Tuesday he has more ambitions.

"My administration will be reclaiming the Panama Canal, and we've already started doing it," Trump said.

Panama President José Raúl Mulino disputed that claim. The canal isn't in the process of being reclaimed, he said.

Trump's threats to retake the canal will be a "Sword of Damocles" for Panama, Farnsworth said, allowing the U.S. to continue to demand more concessions.

Trump has repeated his claims about the canal for months. He has complained the U.S. was being charged too much to use the 51-mile canal, and that that the U.S. "foolishly gave it away."

The U.S. built the 111-year-old canal and agreed to turn it over to Panama in 1999 under a treaty signed by President Jimmy Carter in 1977.

The Panama Canal Authority determines transit fees and operates the canal.

The ports are operated separately through an entity called Panama Ports. It runs the ports at Balboa on the Pacific Ocean and Cristobal on the Atlantic side.

The BlackRock deal gives 90% of Panama Ports to a consortium, which includes BlackRock subsidiary Global Infrastructure Partners and Terminal Investment, a container-terminal operator.

The consortium will also gain control of a total of 43 ports in 23 countries.

The Panamanian government holds a 10% stake in the port company and owns the land where the ports operate.

Trump administration officials had said Hutchison's ownership was a security threat because China could order it to block the canal. Analysts have cast doubt on that possibility, but said the company was subject to Chinese national security laws that allows Chinese authorities to ask Hong Kong companies for information for sensitive data.

Hutchison has operated the ports since 1997. It renewed its agreement for another 25 years in 2021.

The contract process has raised concerns among some Panamanians. The deal was made with Mulino's predecessor.

"Specifically, we went for another 25-year extension without a renegotiation," said Jorge Luis Quijano, a former canal administrator. Panama should "look again at the concession and see what else you can get from it," he said.

Hutchison didn't immediately respond to a request for comment about the deal renewal.

The BlackRock deal puts a high-profile American name on assets that were formerly operated by a Chinese firm, and strategists say that could be a precursor for other U.S. investment in Latin American infrastructure.

"This is a huge strategic victory against Chinese investment in sensitive sectors like ports in Latin America" and globally, said Ryan Berg, director for the Americas at the Center for Strategic and International Studies, a Washington-based think tank.

Getting a discount for military ships passing through the canal would be another victory, Berg said. "That is a big thing, and then he can kind of pack it up, and take it home," he said.

Charges for U.S. Navy ships are a divisive issue in Panama.

Free passage "contradicts the neutrality treaty," said John Feeley, a former U.S. ambassador to Panama. "My sense is there are those who seek a practical and relatively legal interpretation to make it happen and others in the Panamanian government who feel more nationalistically that this is a bridge too far."

U.S. ships are charged based on the amount of water displaced, not on the volume of cargo like other ships, Quijano said. a military ship would pay $50,000 to $60,000 to pass through the canal, compared with an average of $400,000 for other ships.

Secretary of State Marco Rubio visited Panama in February. Afterward, the State Department said on social media that U.S. military ships would no longer pay fees to use the canal.

Panama objected to the claim, and Rubio said free passage for U.S. ships was an expectation, not a current policy.

"The truth is nobody knows what the real issue is here," Farnsworth said. "China? Rates on shipping? U.S. desires to have engineering contracts on the environmental side for canal sustainability? Is it Venezuela and migration? Honestly, it could be all of the above."

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March 06, 2025 15:13 ET (20:13 GMT)

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