The Panama Canal, a remarkable engineering achievement and a vital conduit for global trade, has become a new flashpoint in geopolitical tensions. President-elect Donald Trump has threatened to seek the canal’s return to U.S. control, citing management concerns and its strategic significance for the United States.
Trump’s statements on his Truth Social platform reveal growing apprehension regarding the canal’s operations and its importance to U.S. national security. He remarked, “The Panama Canal is considered a VITAL National Asset for the United States, due to its critical role in America’s Economy and National Security.”
The canal is essential for international supply chains, with approximately 6% of global maritime trade transiting its locks. Nearly 40% of U.S. container traffic uses the canal annually, making the U.S. the largest user. In 2021, over 73% of ships passing through were traveling to or from U.S. ports.
Opened in 1914 after an extensive construction effort by the United States, the canal was transferred to Panama in 1999 under the Torrijos-Carter Treaties. These treaties, negotiated during the Carter administration, have sparked ongoing debate among some U.S. politicians who view the transfer as a strategic blunder.
This significant dependency underscores the canal’s role in reducing shipping times between the Pacific and Atlantic Oceans, benefiting U.S. trade efficiency. Any disruptions or changes in control could have serious consequences for the U.S. economy, particularly for industries reliant on reliable shipping routes.
Trump’s comments extend beyond criticism of the handover; he is now threatening to demand full control of the canal if certain standards are not met. He stated, “If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, and without question.” His concerns largely relate to the perceived unfavorable treatment of U.S. interests, especially regarding the high fees imposed on American shipping.
Beyond economic factors, Trump’s rhetoric reflects broader concerns about China’s growing influence in the region. Since Panama established diplomatic ties with China over Taiwan in 2017, Beijing has significantly increased its economic involvement, including investments in infrastructure projects close to the canal.
U.S. Southern Command officials have raised alarms about these Chinese investments, with General Laura Richardson telling a Senate panel that they could pose risks to U.S. interests. China’s control of ports at both ends of the canal, through Hutchison Ports PPC— a Hong Kong-based company linked to Beijing— heightens these concerns, as it gives China substantial leverage over logistical operations essential for the canal’s efficiency.
This involvement raises questions about the canal’s neutrality, which is meant to be safeguarded under the Neutrality Treaty, ensuring equal access for all nations. China’s role in managing the ports of Balboa and Cristobal could enable it to influence or even manipulate canal operations, jeopardizing U.S. commerce heavily reliant on this route.
There are also security anxieties that China might install surveillance technology in the canal’s infrastructure, potentially monitoring U.S. naval and commercial activities. This risk of espionage could provide China with critical insights into U.S. logistics and military operations.
Trump’s assertions to regain control of the canal would likely face significant legal and diplomatic hurdles. The Neutrality Treaty, which is open-ended, obliges the U.S. to uphold the canal’s neutrality, and any attempt to seize control forcefully would violate international law, harming U.S. relations in Latin America.
Since the handover, Panama has managed the canal effectively, even expanding it in 2016 to accommodate larger ships and doubling its capacity. Nevertheless, Trump’s rhetoric underscores the canal’s ongoing strategic significance to U.S. interests, emphasizing the necessity for vigilance in preserving secure access to this crucial maritime route.
As geopolitical dynamics continue to change, the Panama Canal will remain central to U.S. foreign policy, necessitating a careful balance between advocating for American interests and honoring Panamanian sovereignty. This interplay will continue to shape global trade routes, supply chain stability, and international relations in the region.
