Donald Trump has begun his second term as president by ramping up pressure on Panama, threatening to “take back” the Panama Canal and accusing the country of ceding control of the critical waterway to a US rival: China.
“Above all, China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump claimed in his inaugural speech last month, igniting a wave of global attention.
However, there’s no evidence that China controls the canal, which is run by an independent authority appointed by Panama’s government. Beijing has consistently denied any interference in the canal’s operations. The Panama Canal Authority, an autonomous entity, manages the waterway, ensuring that its operations remain neutral and sovereign under Panamanian control.
The US concern stems from its broader national security agenda, particularly as the Trump administration intensifies efforts to counter China’s growing influence in Latin America. At the heart of Trump’s allegations is the involvement of a Hong Kong-based company, CK Hutchison Holdings, which operates two key ports at either end of the Panama Canal. This conglomerate oversees port operations globally, managing 53 ports across 24 countries.
Panama’s President José Raúl Mulino has firmly stated that Panama’s sovereignty over the canal is non-negotiable. Despite this, the country has made concessions to US pressure, including withdrawing from China’s Belt and Road Initiative, a strategic move that marked a significant blow to Beijing’s influence in the region.
While Trump’s rhetoric suggests imminent Chinese control, the reality is more nuanced. Panama Ports Company (PPC), a subsidiary of CK Hutchison, handles operations at the ports but has no authority over the canal’s governance. The Panama Canal Authority remains the sole entity responsible for canal operations, employing local pilots to navigate ships through the waterway.
US Senator Marco Rubio has voiced concerns about the strategic risks posed by Chinese-owned firms near critical infrastructure. “If there’s a conflict, and China tells them to obstruct the canal, that could be problematic for US interests,” Rubio warned. However, this scenario remains hypothetical, with no concrete evidence supporting such claims.
China’s presence in Panama extends beyond the canal. State-backed companies like China Harbour Engineering Company and China Communications Construction Company have been involved in major infrastructure projects, including a $1.4 billion bridge over the canal. Additionally, COSCO Shipping, a Chinese state-owned enterprise, is a significant canal user, with hundreds of its vessels transiting annually.
Despite these ties, experts argue that China’s influence is limited. The US remains Panama’s dominant economic and security partner. Brian Wong, a fellow at the University of Hong Kong, notes, “Any leverage China hopes to gain through its ties with Panama is capped and limited at best.”
The dynamic between the US, Panama, and China continues to evolve. Mulino’s recent pivot away from China’s Belt and Road Initiative signals a shift towards strengthening ties with the US. However, Panama’s strategic location ensures that both superpowers will continue to vie for influence.
China’s investments in Panama, including trade zones and telecommunications projects, highlight its long-term interest in the region. Meanwhile, the US is likely to maintain its vigilance, ensuring that the Panama Canal remains a symbol of Panamanian sovereignty and a cornerstone of global trade.
In conclusion, while Trump’s claims have reignited debates about foreign influence in critical infrastructure, the Panama Canal remains firmly under Panamanian control. The geopolitical tug-of-war between the US and China will undoubtedly persist, but for now, the canal stands as a testament to Panama’s independence amidst global power struggles.
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