He's getting what he wants

Earlier this year, Trump stated that he wanted Greenland and the Panama Canal to come under the control of the United States.

He went as far as to say that he would not rule out using military force to achieve these goals, stating that the “Panama Canal is vital to our country”. His issues appeared to lie with his belief that “It’s being operated by China . . . And we gave the Panama Canal to Panama, we didn’t give it to China.”

Despite being a pro-US conservative, José Mulino, the president of Panama, responded by insisting that the canal was not being operated by China, and would continue to remain under Panamanian control.

However, within a month, Panama began an audit of a Hong Kong-based port operator CK Hutchison as a nod to Trump. CK Hutchison has operated in the canal for decades, first winning the rights to operate two Panamanian ports in 1997, a right renewed in 2021.

These ‘rights’ work in a similar manner to the way that UK rail operates.

For UK trains, the infrastructure is fundamentally owned by the government, but the government gives private companies the right to operate rail services (subject to regulation) on specific train lines. This will often include international companies, such as Arriva, a German company who have contracts to run a number of rail routes in the UK.

Panama is similar, the underlying infrastructure is controlled by Panama, but the rights to operate parts of it are given to private companies, such as CK Hutchinson, who just happen to be based in Hong Kong. In the same way that Arriva’s presence in UK trains does not indicate Germany controlling the UK, the fact that a company based in Hong Kong operates part of the canal does not indicate Chinese control.

Furthermore, operating infrastructure in this fashion can be beneficial for governments, as it is often not in a country’s best interest to operate large-scale businesses - such as all of Panama’s ports - when these responsibilities can be delegated to private companies. Governments are prone to be less efficient as a single entity (the government) operating an entire route diminishes competition. Without competitive pressure, inefficiencies are likely to creep in often resulting in rising prices.

Ironically, rising prices is something Trump specifically opposes, despite the risk of it happening under his plan to “take back” the Panama Canal. That being said, Trump has not specified how he would plan to operate the canal under U.S. control.

Despite this, it appears that Trump may be starting to get what he wants.

Although, it isn’t exactly the forceful assumption of control foreshadowed at the beginning of the year.

BlackRock, a US asset management company, has agreed to buy the two previously mentioned ports from CK Hutchison for almost $23bn. BlackRock chief executive Larry Fink briefed the Trump administration on the takeover, demonstrating support from the US government on the deal.

A spokesperson for the Hong Kong-based company said that after “Trump won and [..] started making noise about annexing [..] Panama” CK Hutchison “realised that it was a political headache” and began considering a sale.

While Trump may not have seized control of the Panama Canal through military action, as he once suggested, his rhetoric has undeniably shaped events. The audit of CK Hutchison signalled Panama's willingness to appease U.S. concerns, and now, BlackRock’s acquisition of the ports further tilts control toward American hands.