This week, a consortium of U.S. companies led by Blackrock was supposed to complete the purchase of two ports in Panama from CK Hutchison, a Chinese firm based in Hong Kong. U.S. President Donald Trump pointed to the sale as a foreign policy success during his recent State of the Union speech to Congress, claiming it demonstrated that his threats about seizing the Panama Canal had already helped reduce Chinese influence. However, as of late last week, the sale is now on hold. The official explanation from the participants is that the port transfer is a complex transaction that requires more time. The real explanation is that the question of port control is at the center of a geopolitical clash in the hemisphere.
I ended last week’s column on Secretary of State Marco Rubio’s trip to the Caribbean by noting that, if the U.S. only brings threats to its diplomacy with the Caribbean, it will “provide an opening that Beijing will be all too eager to seize.” This idea that China will gain as the U.S. withdraws aid and bullies its allies worldwide has admittedly become a piece of conventional wisdom seen regularly in foreign policy commentary since Trump returned to the White House.
Ryan Berg, director of the Americas Program at the Center for Strategic and International Studies, recently countered that line of analysis with regard to Latin America, arguing that China is unlikely to improve its position despite the Trump administration’s attitude in the region. Berg provides four reasons to support his smart contrarian take: China’s own economic challenges at home, which limit its potential to exploit Trump’s errors; clear U.S. redlines from the Trump administration, which will deter China from trying to do so; private sector investments from U.S. companies, which can offset some of the reduction of U.S. government assistance; and the preferences of Latin American governments, which may move them away from China as an alternative to the U.S. toward partners such as Europe or other Asian countries. Left unstated is the scenario in which China, given its own constraints, may prefer to lean into Trump’s views on spheres of influence and retreat from the Western Hemisphere in order to shore up its influence in its own neighborhood.