The world’s largest investment fund, BlackRock, has purchased two crucial ports at the Panama Canal

A consortium of investors led by BlackRock has reached an agreement to acquire, from CK Hutchison, majority stakes in the ports located on both banks of the Panama Canal for $22.8 billion, according to statements made by the companies on Tuesday, as reported by WSJ.

The transaction would transfer the essential ports into the ownership of an American company, acquiring them from CK Hutchison, based in Hong Kong. Although the Panama Canal is under Panama’s control, the ports owned by foreign investors on both sides have been perceived as a threat by the Trump administration.

According to a person familiar with the situation, BlackRock informed the Trump administration and Congress about this transaction.

“China is exploiting the Panama Canal, and we did not give it to China,” Trump stated in his inaugural address, referring to the 1977 treaty through which Panama regained control of the canal.

Opposition in the United States to the current ownership structure is based on fears that China could use the ports for military purposes, including the surveillance of naval traffic. However, Panamanian officials and several former American military officials have maintained that the Chinese presence does not constitute a military threat and does not compromise the canal’s neutrality.

The United States, which built the Panama Canal opened in 1914, later ceded it to Panama at the end of 1999, following a treaty negotiated more than 20 years earlier by then-President Jimmy Carter. Trump repeatedly claimed that the agreement was disadvantageous for the U.S. and expressed dissatisfaction with the fees imposed by Panama and the Chinese infrastructure built along the waterway.

In addition, BlackRock, through its new infrastructure division, Global Infrastructure Partners, together with Terminal Investment of Geneva, has agreed to acquire a 90% stake in Panama Ports, a company that owns and operates the Balboa and Cristobal ports in Panama. The consortium also agreed to purchase the majority stake held by CK Hutchison in another 43 ports across 23 countries.

If the transaction is finalized, it could significantly allay fears regarding China’s influence over the Panama Canal.