Trump, China, and the Panama Canal: America's Fight for Control

The Panama Canal, often heralded as one of the wonders of the modern world, is far more than a feat of engineering — it is a cornerstone of U.S. national security and economic prosperity.

This vital maritime shortcut has connected the Atlantic and Pacific Oceans for over a century, saving ships valuable time and resources and serving as a key artery for global commerce.

As the United States faces a shifting geopolitical landscape, particularly with China’s growing influence, it is time for America to reassert its leadership in protecting this strategic asset.

A Price Paid in Blood and Treasure

Constructed at immense cost in lives and treasure, the Panama Canal opened in 1914 after years of arduous labor and innovation. The United States invested $375 million (equivalent to over $12 billion today) and sacrificed the lives of over 5,600 workers, many of whom succumbed to disease in the mosquito-infested jungles of Panama.

Presidents Theodore Roosevelt and William Howard Taft both recognized the Canal’s significance, not only as an economic boon but as a critical asset for national defense. Roosevelt’s vision for a lock-based canal remains a testament to American ingenuity and determination.

The Canal’s strategic importance is undisputed. It allows for the rapid deployment of the U.S. Navy from one ocean to another, drastically reducing travel time and bolstering America’s ability to respond to global threats. Over 70 percent of all transits through the Canal are either headed to or coming from U.S. ports, underscoring its integral role in America’s economic ecosystem.

Yet, despite this monumental investment and its undeniable significance, the United States now faces a dilemma: how to counteract the creeping influence of China’s state-owned enterprises, which threaten the Canal’s neutrality and America’s strategic interests.

The Threat of Chinese Influence

Despite its history and importance, the Panama Canal’s future faces uncertainty, particularly with the growing influence of Chinese state-owned enterprises. Hutchison Ports PPC, a Hong Kong-based holding company, manages key ports at both ends of the Canal. While the company’s initial involvement was not seen as a national security threat, the political landscape has changed. China’s aggressive actions in Hong Kong and its global Belt and Road Initiative have raised alarm bells in Washington.

Hutchison Ports PPC’s 25-year contract for the Port of Cristobal expired in January 2022, and its potential renewal presents a critical decision for Panama.

Allowing Chinese-controlled entities to maintain or expand their foothold in the Canal’s operations poses significant risks. China’s growing influence over transshipment cargo operations and its track record of using economic leverage for political gain should give the U.S. and its allies pause.

This is not mere speculation. China’s record of leveraging infrastructure projects to expand its geopolitical influence is well-documented. From Africa to Southeast Asia, Beijing has used loans and investments as tools of economic coercion. With the Panama Canal’s strategic location and its importance to global trade, it’s not difficult to imagine a future where China’s involvement poses direct challenges to U.S. interests.

America Must Reclaim Its Role

The Panama Canal’s neutrality and accessibility are essential for maintaining global stability and free trade. Over 60 percent of goods transiting the Canal either originate in or are destined for U.S. markets, so any disruption — whether through increased fees, political leverage, or outright control — would have far-reaching consequences.

China’s activities in the region highlight its strategic ambitions. While Beijing does not operate the Canal, its control over key ports and increasing involvement in infrastructure projects signal a broader effort to influence the waterway’s operations.

In 2018, U.S. pressure successfully thwarted China’s plans to build a massive embassy near the Canal. However, continued vigilance is required to counteract Beijing’s incremental gains.

Furthermore, the economic repercussions of Chinese control over the Canal’s critical infrastructure cannot be overstated. For the United States, the Canal is not merely a convenient maritime route but a linchpin in the broader framework of national security and economic stability.

As China seeks to expand its influence, America must act decisively to protect its interests.

A Renewed Opportunity for American Leadership

The expiration of Hutchison Ports PPC’s contract offers a pivotal opportunity for the United States to encourage Panama to pursue an open and transparent bidding process. American and allied companies must be incentivized to participate, ensuring the Canal’s operations align with democratic values and free-market principles.

This is where former President Donald Trump’s “America First” policies could provide a road map for future action. Trump’s administration consistently prioritized U.S. interests in global trade and infrastructure projects, and his approach to countering China’s economic ambitions resonated with many Americans. Reviving these principles in the context of the Panama Canal could be a critical step toward securing this strategic asset.

Moreover, the U.S. should integrate the Panama Canal into a broader strategy for Central America, addressing economic investment and security and governance challenges. Strengthening Panama’s institutions and infrastructure will bolster its resilience against external pressures, including those from China.

A Warning from History

Past American leaders understood the Canal’s value. Governor Ronald Reagan famously remarked, “We bought it, we paid for it, we built it, and we intend to keep it.”

While the Carter Administration’s 1977 decision to transfer control of the Canal to Panama was controversial, it underscored the importance of fostering a cooperative relationship with the Panamanian government.

Today, that partnership must be reinvigorated to counteract external threats and secure the Canal’s future.

Additionally, historical investments in the Canal provide a blueprint for modern action. Economic foresight and strategic necessity drove the United States’ original construction of the Canal. In the face of new challenges, America must again rise to the occasion, leveraging its resources and influence to safeguard this indispensable asset.

Conclusion: America Must Act

The Panama Canal is not merely a relic of America’s engineering prowess; it remains a living testament to the nation’s global leadership.

As China’s influence grows, the United States must take decisive action to protect this critical asset. By fostering transparent competition, strengthening bilateral relations with Panama, and integrating the Canal into a comprehensive regional strategy, America can ensure that the Panama Canal remains a beacon of free trade and security for generations to come.

President Theodore Roosevelt’s words resonate as a call to action: “By far the most important action I took in foreign affairs during the time I was President was related to the Panama Canal.”

It is time for the United States to honor that legacy by safeguarding the Canal’s future and reaffirming its role as a global leader.