During his inaugural address, President Donald Trump reiterated his claim that China is operating the Panama Canal. He stated, "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."
The Panama Canal, spanning 51 miles (82km) across Panama, serves as a vital waterway connecting the Atlantic and Pacific oceans. Approximately 14,000 vessels utilize the canal annually, reducing travel time and costs significantly compared to the previous route around South America.
President Trump's focus on Panama and its canal is evident beyond his inauguration speech. Earlier, he alleged on social media that Chinese soldiers were illicitly managing the canal, a statement promptly refuted by officials in Panama City and Beijing. Panamanian President José Raúl Mulino dismissed the claim as baseless, emphasizing that there was no Chinese involvement in canal operations.
While President Trump has threatened force to reclaim the canal, his allegations of excessive fees charged to US vessels passing through were debunked by Panamanian authorities. President Mulino reiterated that no foreign nation interferes with the canal's administration, which falls under the Panama Canal Authority, not the Chinese military.
Although some US officials share apprehensions over Chinese investments in the canal, the Panama Canal's construction and administration have historical ties to the United States. Following its completion in 1914 under US control, the canal gradually transitioned to Panamanian authority through treaties signed in 1977.
The canal's neutrality is safeguarded by agreements with the US, allowing for US military intervention if threatened. Despite Chinese investments and cargo volume through the canal, there is no public evidence of Chinese government control or military presence.
Chinese companies, including Hutchison Port Holdings operating adjacent ports, have expanded their presence in Panama. Concerns over Chinese influence have surfaced given the strategic importance of these ports and their potential impact on global trade dynamics.
The strengthening economic ties between China and Panama, illustrated through large-scale investments and infrastructure projects, have raised geopolitical tensions with the US. While these activities have led to perceptions of Chinese influence, operational control of select ports does not equate to ownership.
With China focused on expanding its presence in Latin America, Panama's shift in diplomatic relations from Taiwan to China underscores this growing influence. Chinese initiatives like the Belt and Road Initiative and cultural exchanges further demonstrate China's efforts to enhance its soft power in the region.
This dynamic landscape reflects the evolving role of China in Panama and the wider geopolitical implications of its expanding influence in Latin America.