Ted J Butler: Panama on the Front Lines of US/China Trade War

In this episode Michael Fox is joined by regular contributor, Ted J Butler to discuss the recent attempt by BlackRock to acquire parts of the Panama Canal and 43 global ports from Hong Kong-based CK Hutchinson for $22 billion. The deal has stalled due to the ongoing US-China trade war and complications with Panamanian authorities. Ted notes that Chinese influence in Panama has increased significantly in recent years, with China surpassing the US as Panama's largest export partner. The deal's approval is complex, involving multiple parties, and its outcome remains uncertain.

China's Influence on Panama Canal

Ted and Michael discuss the geopolitical implications of China's growing influence in Panama, particularly concerning the Panama Canal. Ted believes there's a high probability that a deal won't go through, which would be detrimental to US foreign policy and Trump's image. They explore the strategic importance of the Panama Canal for US trade and how China's Belt and Road Initiative has increased its economic power in the region. The conversation touches on the US response, including diplomatic pressure and the "Donrow doctrine," as well as Panama's delicate position between US and Chinese interests. They also discuss the broader shift in South American trade partnerships from the US to China over the past two decades.

Blackrock's Strategic Panama Port Deal

Ted discusses Blackrock's acquisition of two ports in Panama, suggesting the deal may have been premeditated and influenced by Larry Fink's relationship with Donald Trump. He explains the complex network of companies involved, including Global Infrastructure Partners and Terminal Investment Limited. Michael questions the profit motivation behind the deal, and Ted acknowledges that while Blackrock's exact ownership allocation is unknown, they are likely to be the majority shareholder. The conversation touches on Blackrock's history of strategic acquisitions and Fink's tendency to align with political winds for business advantages.

Panama Canal and US-China Tensions

Ted discusses the geopolitical implications of the Panama Canal and broader US-China relations. He believes the potential deal involving the Panama Canal is unlikely to happen and predicts continued escalation of tensions between the US and China, with no trade deal in sight. Ted suggests this could lead to a global economic slowdown. Regarding South America, Ted expects China to increase its investments and influence in the region, particularly in countries rich in resources like Chile and Peru. He notes that China's infrastructure investments are often more appealing to developing countries than the US's military presence.

Read Ted's article in the May/June issue of The Prospector