Trump says US 'taking back' Panama Canal after ports deal

WASHINGTON

President Donald Trump said Tuesday the United States had started to take back the Panama Canal after a deal by a Hong Kong firm to sell ports to a U.S.-led consortium.

"To further enhance our national security, my administration will be reclaiming the Panama Canal, and we've already started doing it," he said in a speech to Congress. "We're taking it back."

Hong Kong-based CK Hutchison Holdings has agreed to sell control of two ports near the Panama Canal to US-based investment company BlackRock, according to an announcement on Tuesday.

Trump has repeatedly threatened the use of force to seize the canal, claiming that Hutchison's ownership of two ports, one at either entrance to the canal, gave China control over the strategic waterway that links the Pacific and Atlantic oceans.

The sale includes transferring 90 percent interests of the ports of Balboa and Cristobal in Panama from CK Hutchison to a consortium that includes BlackRock, Global Infrastructure Partners, and Terminal Investment.

The transaction also includes the consortium receiving units that hold 80 percent of the Hutchison Ports group, which operates 43 ports in 23 countries.

The sale will generate cash proceeds of $19 billion for CK Hutchison, said Frank Sixt, the holding’s co-managing director.

Sixt said the “transaction is purely commercial in nature and wholly unrelated to recent political news reports” on the Panama ports.

But analysts said it came as a relief nonetheless for President Jose Raul Mulino, who had been under fierce pressure to reduce China's footprint in the country without riling the second-largest user of the canal after the United States.