Wall Street implements Trump's power politics

Following military threats from the new US government because of allegedly too much Chinese influence in the Panama Canal, the US financial investor Blackrock is buying two ports on the artificial waterway. The Hong Kong conglomerate CK Hutchison announced that it would sell the facilities at the two mouths of the canal and 41 others in 20 countries worldwide to the world's largest asset manager for around 19 billion US dollars.

US President Donald Trump celebrated the deal as his own success in his State of the Union address to the US Congress just a few hours later: "We're taking the canal back!" Trump announced. "The Panama Canal was built by Americans for Americans, not for others," he said. The work had come at "an enormous cost in American blood and wealth." 38,000 workers died during construction, many of them from malaria.

According to experts, the number of Americans who actually died during the construction of the canal was between 300 and 350. The USA built and initially operated the canal from the end of the 19th century. It was not until 2000 that Panama was granted full sovereignty over the area.

The fact that the conservative financial investor Blackrock is implementing Trump's power politics is an "elegant solution to a seemingly insoluble crisis," said Benjamin Gedan of the US think tank Wilson Center. For some historians, the move brought back memories of the power that Wall Street once had in Latin America. Little Panama has "completely lost" to Trump's new America First policy, said Peter James Hudson, history professor and author of a book entitled "Bankers and Empire: How Wall Street Colonized the Caribbean."

Important key to global trade flows

Six percent of world trade passes through the waterway, which massively shortens the sea route between the Atlantic and the Pacific. The canal is considered an important key to global trade flows and is of crucial importance for US trade, as two-thirds of the goods shipped through the canal are transported to or from the largest economy. A total of 12,000 ships pass through the canal every year.

Since taking office, Trump has repeatedly accused Panama of "ripping off" the USA by charging fees for using the waterway. These revenues recently amounted to five billion US dollars, about three percent of the country's gross domestic product. Trump also claimed that the Central American state had effectively handed over control of the canal to China. The USA must monitor it, however - if necessary, this must be enforced by force of arms.

One of the first official acts of US Secretary of State Marco Rubio was a visit to Panama City in early February to underline the US's claims. Shortly afterwards, Panama announced that it would withdraw from China's global infrastructure project "New Silk Road" . The Panamanian media criticized this as "bowing down to the USA". The government in Beijing was unusually angry that Washington was deliberately sowing discord between China and Latin America with "dishonest statements".

China is heavily involved in the region. A port in Peru was opened in November, financed by the People's Republic. The two Panamanian ports were bought by a Hutchison subsidiary in 1997. Trump has repeatedly claimed that the port operator, multi-billionaire Li Ka-shing, is Beijing's extended arm.

sale under political pressure

However, sovereignty over the waterway lies in the hands of the Panamanian canal administration ACP, which is contractually obliged to remain neutral. Shortly after Rubio's visit to Panama, the Li family is said to have started looking for a buyer for its port holdings in the USA, "because they believed they were under political pressure," writes the New York Times .

This was denied on Wednesday. It is a "global transaction between private companies," said Panama's President José Rael Mulino about the geopolitical aspect of the port sale. However, he does not have and does not want to have "a dispute with the USA over the canal." The transaction is "purely commercial in nature and has nothing to do with the latest political news," stressed Frank Sixt, co-managing director of CK Hutchison. The group's holdings in other ports such as in Hong Kong or Shenzhen are not affected by the transaction.