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

The Panama Canal, often celebrated as one of the greatest modern engineering marvels, is more than just an infrastructure achievement—it is a crucial element of U.S. national security and economic strength.

For over a century, this essential maritime passage has linked the Atlantic and Pacific Oceans, significantly cutting transit times for vessels and serving as a vital corridor for international trade.

As global power dynamics shift—particularly with China's expanding footprint—the U.S. must reaffirm its leadership to protect this strategic gateway.

A Price Paid in Blood and Treasure

Built at a tremendous cost in both human lives and financial resources, the Panama Canal was inaugurated in 1914 after years of innovation and grueling labor. The United States invested $375 million (now exceeding $12 billion in today’s value) and lost over 5,600 workers to harsh conditions and diseases in the mosquito-ridden terrain of Panama.

Presidents Theodore Roosevelt and William Howard Taft recognized the Canal’s significance—not just as an economic powerhouse but also as a vital defense asset. Roosevelt’s vision for a lock-based canal remains a testament to American ingenuity and persistence.

Strategically, the Canal is indispensable. It enables the U.S. Navy to move swiftly between oceans, reducing travel time and enhancing America's capacity to respond to global threats. More than 70 percent of all ships passing through the Canal are either bound for or departing from U.S. ports, demonstrating its deep integration into the American economy.

Yet, despite this invaluable investment and undeniable importance, the United States faces a pressing challenge: countering China’s increasing influence over the Canal’s operations and ensuring its continued neutrality.

The Threat of Chinese Influence

The Panama Canal’s future is increasingly uncertain due to the expanding presence of Chinese state-owned enterprises. Hutchison Ports PPC, a Hong Kong-based firm, controls significant ports at both ends of the Canal. While its initial involvement was not perceived as a security risk, shifting geopolitical realities have heightened concerns. China’s assertive actions in Hong Kong and its global Belt and Road Initiative have raised alarms in Washington.

The 25-year lease of Hutchison Ports PPC at the Port of Cristobal ended in January 2022, and the decision regarding its renewal carries immense strategic weight.

Allowing Chinese-controlled companies to sustain or expand their hold over the Canal presents serious risks. China’s growing dominance in cargo transshipment operations, along with its history of leveraging economic power for political influence, should be cause for concern among U.S. policymakers.

These worries are not unfounded. China's track record of utilizing infrastructure projects as tools of geopolitical strategy is well-documented. Across Africa and Southeast Asia, Beijing has deployed loans and investments as instruments of economic coercion. Given the Panama Canal’s pivotal role in global trade, the potential for China to exploit its influence there is a looming threat to U.S. interests.

America Must Reclaim Its Role

Ensuring the Panama Canal remains neutral and accessible is crucial for maintaining global trade stability. Over 60 percent of goods moving through the Canal are either heading to or coming from the United States. Any disruption—whether through economic manipulation, increased fees, or direct control—would have severe consequences.

China’s activities in the region reflect a broader ambition. While Beijing does not operate the Canal itself, its increasing involvement in regional infrastructure projects suggests a long-term strategy to exert greater influence over its operations.

In 2018, U.S. diplomatic pressure successfully blocked China’s proposal to build a massive embassy near the Canal. However, continued vigilance is necessary to counter China’s incremental gains.

Additionally, the economic implications of Chinese control over critical infrastructure cannot be understated. The Panama Canal is not just a key transit route—it is an integral component of American national security and economic stability.

With China expanding its reach, the United States must act decisively to protect its strategic interests.

A Renewed Opportunity for American Leadership

The expiration of Hutchison Ports PPC’s lease presents the U.S. with a critical opportunity to encourage Panama to adopt an open and transparent bidding process. American and allied firms should be incentivized to compete, ensuring that the Canal’s management aligns with democratic principles and free-market values.

This is where former President Donald Trump’s “America First” policies offer a relevant framework for future action. Throughout his administration, Trump prioritized U.S. interests in global trade and infrastructure projects. His strategy to counter China’s economic expansion resonated with many Americans. Applying these principles to the Panama Canal could be essential in securing its future.

Beyond immediate competition for the Canal’s contracts, the U.S. should incorporate it into a broader Central American strategy, tackling issues of economic investment, governance, and security. Strengthening Panama’s institutions and infrastructure will reinforce its ability to resist foreign pressures, including those from China.

A Warning from History

Past U.S. leaders understood the Canal’s importance. Governor Ronald Reagan once stated, “We bought it, we paid for it, we built it, and we intend to keep it.”

The Carter Administration’s 1977 decision to transfer control of the Canal to Panama remains controversial. However, it also emphasized the necessity of a cooperative relationship with the Panamanian government.

Today, this partnership must be revitalized to address external threats and secure the Canal’s long-term stability.

Furthermore, the historical U.S. investment in the Canal offers a guide for present-day action. Economic foresight and strategic necessity drove its original construction. In confronting modern challenges, America must once again rise to the occasion, leveraging its resources and influence to protect this invaluable asset.

Conclusion: America Must Act

The Panama Canal is more than a symbol of American engineering excellence; it remains a cornerstone of U.S. global leadership.

With China’s influence growing, the United States must take decisive steps to safeguard this strategic asset. By promoting transparent competition, strengthening its partnership with Panama, and incorporating the Canal into a broader regional strategy, America can ensure its continued role as a defender of free trade and security.

President Theodore Roosevelt’s words remain a clarion call: “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 U.S. to honor that legacy—protecting the Canal’s future and reaffirming its role as a dominant global power.