Bridging Troubled Waters in Panama Deal

A new deal with the Panama Canal could bridge troubled waters in exports. 

The rundown: A Hong Kong conglomerate is selling its stake in key Panama Canal ports to a U.S.-led consortium including U.S.-based asset management company BlackRock. The price tag? Nearly $23B. 

That’s big news that might have gotten overshadowed by all the tariff talk last week!

The deal would ultimately put the ports under U.S. control, which has been a contention point with the Trump administration. But the Panama government still must approve the deal. 

Waterway robbery? On Day 1 of his second term, President Donald Trump accused the Panamanian government of acting impartially toward shipping companies from certain countries. U.S. officials claimed Panama hikes fees for American shipping companies while keeping rates lower for countries like China. Panama denies that claim. 

ICYMI: The Panama Canal is vital to U.S. agricultural exports, especially the 600M bushels of soybeans that transit the canal annually. Drought in late 2023 and early 2024 severely limited exports through the canal, leading to higher rates, delayed exports, and some ship rerouting.

The BlackRock deal could mean good news for U.S. agricultural trade, according to farm groups like the American Farm Bureau Federation. The canal is the transit point for 72% of cargo going to and from the U.S. And the White House views the deal as a win for the U.S.

Soundbite: “‘My administration will be reclaiming the Panama Canal, and we’ve already started doing it.” — President Trump