Escalation With Panama Exposes Finance Firms’ Role in US Rivalry With China

After weeks of Donald Trump’s threats to “take back” the Panama Canal, the White House has ordered the military to come up with an assortment of plans to make the president’s imperial fantasy a reality. According to NBC News, which first reported on the directive, the plans range from increasing military partnership with Panama to forcefully seizing the canal.

This news came just days after Trump delivered a boastful message to Congress on March 4. “My administration will be reclaiming the Panama Canal, and we’ve already started doing it,” he gloated, adding that “just today a large American company announced they are buying both ports around the Panama Canal.”

That “large American company” — BlackRock — may be the most powerful firm on Wall Street.

BlackRock is the world’s largest asset manager and the poster child of the post-2008 concentration of corporate ownership into the hands of a small group of giant companies offering low-fee index funds. Recently, BlackRock has started shifting toward more investment in “alternative” private markets, including infrastructure. The deal that Trump heralded was a reference to BlackRock’s acquisition, announced hours before his speech, of two critical ports on either side of the Panama Canal, along with dozens of other ports located across the world.

For Trump, the Panama Canal has become a flashpoint for the assertion of U.S. power as he escalates geopolitical pressure on China. BlackRock’s acquisition is a coup for the firm, but it also signals that U.S. corporations, and finance capital especially, remain an arm for the projection of U.S. influence in the global imperial struggle for control over critical resources and infrastructure. Trump’s bullying campaigns will aim to pressure concessions that open up space for U.S. corporations to step in and capitalize, taking control over assets while boxing out rivals.

“There’s been a shift toward containing China, and American imperial interests have been defined more narrowly as defense of particularly American capitalists against others,” Stephen Maher, an economics professor at SUNY Cortland, told Truthout. “So control over the strategic ports by BlackRock is no doubt seen in geopolitical terms as a victory in this geopolitical contestation with China.”

The Rise of BlackRock

On March 4, the announcement came that BlackRock, leading a group that included Global Infrastructure Partners (GIP), a BlackRock subsidiary, and Terminal Investment Limited, a global ports operator owned by the Italian billionaire Aponte family, had struck an agreement to acquire a huge portfolio of ports from the Hong Kong-based CK Hutchison, owned by the billionaire Li family, for $22.8 billion.

The acquisition includes both the Balboa and Cristóbal ports, located on opposite sides of the Panama Canal. According to the Wall Street Journal, these two ports “handled 40 percent of all containers that crossed the waterway last year.”

The agreement also stated that BlackRock’s consortium would acquire a portfolio of 43 ports with 199 berths across 23 countries, placing a U.S. investment firm atop a global network of ports that stretches from Australia to Egypt, Mexico to Poland, and Thailand to Pakistan.

With this single deal, over 40 ports across the globe, including the two critical Panama Canal ports, will now come under the control of the most powerful financial firm in the U.S. When combined with its current port holdings, says the Wall Street Journal, BlackRock and its partners “would operate about 100 ports around the world after the deal closes.”

This comes as BlackRock already oversees a record $11.6 trillion in assets, equal to around the combined GDP of Japan, India and Brazil.

BlackRock ascended in the financial world by offering clients low-fee index funds, which are funds whose investments track stock and bond markets indexes. What this means, essentially, is that an investment in a single index fund — for example, BlackRock’s iShares S&P 500 Index Fund — is actually an investment in hundreds of different stocks or bonds.

This gave BlackRock, along with other big asset management firms like Vanguard and State Street, control over huge ownership shares of virtually every public corporation. One study noted that these firms together were the largest shareholder of 88 percent of the S&P 500 firms.

“They became by far the largest owners in the American economy,” said Maher, who coauthored a recent book on BlackRock’s rise. “The Big Three asset managers have effectively replaced the banks as the center of power within Wall Street today.”

For Trump, the Panama Canal has become a flashpoint for the assertion of U.S. power as he escalates geopolitical pressure on China.

Maher says that “Blackrock has been the most important financial institution in contemporary capitalism” since 2008.

The firm also has political clout. Its executives were appointed to top positions in the Biden administration, and both the first Trump and Biden administrations worked closely with BlackRock to coordinate the economic response to the COVID pandemic.

BlackRock’s Infrastructure Turn

Over the past several years, BlackRock has moved beyond managing passive investment funds and into “alternative” private markets such as real estate, private credit and infrastructure. In doing so, BlackRock is part of a wider move among the giants of financial capital toward consolidation and diversification.

“BlackRock is interested in infrastructure because it’s very possible that American equity markets are significantly overvalued, or that inflation will continue to be a problem,” said Maher. “Owning infrastructure is basically a crisis-proof revenue stream that Blackrock can include within its mix of funds that it offers investors which can reduce the risk of disruptions to people’s ability to get returns.”

Indeed, the Wall Street Journal noted that BlackRock and other bidders for the ports “coveted the large chunk of strategic ports that they believe will produce steady and stable returns for decades.”

BlackRock’s swing toward infrastructure follows a larger trend of asset management giants seeking ownership over “real” assets like housing and utilities. A critical turning point in BlackRock’s pivot toward infrastructure came in January 2024 when the firm announced its $12.5 billion acquisition of GIP, a major infrastructure-focused private equity firm with holdings across the world and one of BlackRock’s partners in the Panama Canal port acquisition.

GIP’s founder and CEO, Adebayo Ogunlesi, has a lower public profile than BlackRock CEO Larry Fink, but Ogunlesi is a powerhouse. He was, until the BlackRock deal, the lead director of Goldman Sachs in addition to his role at GIP, and he recently joined the board of OpenAI. Ogunlesi served on Donald Trump’s short-lived CEO Council and also chaired Biden’s National Infrastructure Advisory Council.

“Ogunlesi had built GIP in less than two decades into one of the standout firms in the lucrative private investment industry,” noted the Financial Times, with “$106 billion in assets, including stakes in airports in Sydney and London, ports, green energy, and large pipelines.”

In acquiring GIP and allying with Ogunlesi, Fink forged a new battering ram that combined BlackRock’s financial assets with GIP’s inroads and expertise in private infrastructure markets.

China and the U.S.

Since BlackRock became the exemplar of post-2008 “asset manager capitalism,” interimperial competition between the U.S. and China has intensified, especially over technology and global access to raw materials.

China has expanded its influence through the Belt and Road Initiative by financing new infrastructure projects across the world. Today, China is South America’s top trading partner. Brazil, Peru, Mexico, Argentina, Chile, and others are major recipients of Chinese investment. Panama was the first Latin American nation to join the Belt and Road Initiative.

U.S. alarm over China’s growing influence in Latin America predates Trump. For example, U.S military leaders previously expressed alarm over what they called “security risks” from a Chinese-backed megaport on the Peruvian coast.

And while Trump has stepped up his aggressive rhetoric, U.S. hostility toward China is shared by Democratic leaders. In fact, what officials have called the “pivot to Asia” was first articulated by Hillary Clinton in 2011, when she served as secretary of state for the Obama administration.

“There is a bipartisan consensus in Washington that China represents America’s principal competitor and rival, and that it has to be prevented from achieving equal status with the U.S., economically, technologically, and otherwise,” Michael Klare, professor emeritus at Hampshire College and defense correspondent for The Nation, told Truthout.

“President Biden was even harsher than Trump One in imposing sanctions and tariffs on China and cutting off the flow of technology and microchips to China,” said Klare.

Klare emphasizes that much of this power struggle — especially for Trump — revolves around access to resources.

“It’s about his obsession with vital resources and their importance in maintaining the economic power of a country,” said Klare. “He believes that countries must control the flow of raw materials, energy and vital minerals, and the Panama Canal is a vital and strategic link in the global trade of raw materials and vital resources.”

With this single deal, over 40 ports across the globe, including the two critical Panama Canal ports, will now come under the control of the most powerful financial firm in the U.S.

Trump’s “particular obsession with resources and raw materials” is also “fueling his desire to turn Canada into a fiefdom of the United States,” says Klare, “because Canada has some of the world’s largest reserves of vital minerals that he covets.”

It also explains Trump’s “fixation” with Greenland, Klare adds, “which also has rare earth and other vital materials that he seeks.”

“Spoils” for Corporate America

Trump’s campaign to strongarm influence over infrastructure hubs and resources presents openings for corporate power and U.S. megafirms like BlackRock.

The Financial Times suggests that, because of Trump’s pressure campaign, the Li family began seeking to sell CK Hutchison’s ports after Trump’s inauguration, and they wanted a U.S. buyer.

The Wall Street Journal reports that “Hutchison executives had grown uneasy that a hostile Trump administration could make life hard on their sprawling global conglomerate” and that they had “weighed selling” their Panama Canal ports and dozens of others.

With “Trump applying pressure,” along with “Hutchison shares trading at a substantial discount to the company’s underlying assets,” the company decided it was time to make a deal.

U.S. private equity giants Blackstone and KKR also put in bids, but BlackRock “placed the highest bid with the most attractive terms” and “had fewer antitrust concerns related to existing assets in the same markets as some competitors.”

Other factors, such as “Fink’s political connections, GIP’s operational expertise in ports, and an existing relationship between the Aponte and Li families helped the BlackRock consortium gain the most traction,” said the Wall Street Journal.

According to reports, Fink and Ogunlesi briefed Trump and top cabinet members on the deal before it was announced, and the administration was supportive.

On the evening the deal was announced, Trump claimed victory during his speech to Congress with an allusion to BlackRock, referred to as “a large American company.”

Ironically, BlackRock had become a focus of the GOP’s so-called “anti-woke” attacks before the firm started retreating — like many other corporations — from its climate and DEI commitments.

The whole spectacle signals that corporate behemoths who play ball with Trump can cash in. The New York Times called the deal “an indication of the spoils available to American companies as the Trump administration pursues its America First foreign policy.”

“I think that Trump is very keen to take assets from wherever he can, and to benefit his friends and maybe his own companies,” Julie Greene, a history professor at the University of Maryland, told Truthout. “I think that Panama should be seen within that light.”

Panama, Trump and the Future of U.S. Empire

Greene, who wrote two books on the making of the canal that emphasize the critical role of Panamanian and Caribbean laborers, calls Trump’s claim that 38,000 Americans died building the canal “ridiculous.”

The U.S. backed Panama’s independence from Colombia in 1903 but then “swiftly seized control over the heart of the young republic—the territory that would become the Panama Canal Zone,” writes Greene.

Greene told Truthout that the 1903 treaty that gave the U.S. control over the Panama Canal Zone — resulting from negotiations with a French company that had kept digging the canal after the French government’s earlier failed effort — turned Panama into “a neocolony completely dominated by the United States” and “sacrificed Panamanian sovereignty for the next 100 years.”

In the 1960s and 1970s, Panamanian popular opposition to U.S. control of the Canal Zone intensified against a global backdrop of rising anti-colonial resistance. This ultimately compelled U.S. president Jimmy Carter, against opposition, to sign the 1977 treaties that transferred control of the canal to Panama in 1999.

Trump’s aggressive posture toward Panama, and BlackRock’s takeover of key canal ports, signal continuity with a long tradition of U.S. empire in Latin America.

Greene told Truthout that the U.S. empire has always been a “shapeshifter” that has “employed different means to expand its domination and ability to extract resources and control other territories.”

“It’s used formal colonialism in some cases,” she said, “but economic expansionism, with corporate power closely tied to the U.S. government, has been extremely important, notably in the Caribbean and Latin America.”

Trump’s aggressive posture toward Panama, and BlackRock’s takeover of key canal ports, signal continuity with a long tradition of U.S. empire in Latin America.

The Guatemalan coup of 1954, backed by the United Fruit Company, and the 1973 coup against Salvador Allende in Chile, backed by the International Telephone and Telegraph Corporation, are just two of “the most infamous cases of U.S. assertion of power in Latin America” that “have been closely linked to corporate demands,” Greene said.

Maher says Trump’s actions — around the Panama Canal, but also elsewhere — represent an abandonment of the post-World War II ruled-based global order, where the U.S saw its role “as the overall guarantor of the interests of global capital.”

It’s a shift “toward a much narrower and nationalistic approach to international politics and empire,” he says, “which has a lot to do with ramping up competition with China and making sure that American corporations are preeminent and owning strategic assets and resources.”