Panama Canal Tensions

In his inaugural address, Trump mentioned several things, including his plans regarding 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.” 

Current Panamian President José Raúl Mulino responded swiftly with an official statement on X. He restated Panama’s sovereignty over the canal. 

For historical context, the Panama Canal resulted from the Hay-Bunau-Varilla Treaty of 1903. The United States assured Panama’s independence, while Panama gave a 10-mile-wide strip of land. The U.S. paid ten million dollars for the right to build and $250,000 annually in rent while in control. The construction was completed in 1914. Almost 90 years later though, Panama was given full control of the canal in 1999. 

China has indeed been growing its influence in some way in Panama. Hong Kong-based companies, Hutchinson-Whampoa operate ports at the ends of the canal. However, it’s important to note that the consortium won the right through a bidding process. Furthermore, China is the second biggest user, right after the U.S. However, it’s difficult to claim that China is actively influencing Panama’s canal management. 

Panama claims that the United States has no legal basis to take the canal back. In the Torrijos-Carter Treaties, the one role that is given to the US states when the neutrality of the canal is broken, then the US may come and aid Panama in restoring its neutrality. Panama asserts that they have not breached any of the treaty policies. According to the former Panamanian President, Aristides Royo, he says that “the only way that the United States has to take back the canal is by force.”

The United States has yet to take drastic measures against Panama. But, Marco Rubio, the Secretary of State, did speak to Mulino. He advised decreasing the amount of Chinese influence, and Mulino agreed. He said Panama will not rejoin China’s Belt and Road Initiative plan when the agreement expires.