Trump's Push to Reclaim the Panama Canal: A Bold Move or a Risky Gamble?

In partnership with

Pharmaceuticals can’t do it all. Meet the immersive tech improving mental health.

SoundSelf uses sound, light, and biofeedback to help users reach states of profound mental stillness and clarity in as little as 15 minutes. You can become a shareholder and help bring this life-changing tech to more people.

Join the Raise

Read the Offering information carefully before investing. It contains details of the issuer’s business, risks, charges, expenses, and other information, which should be considered before investing. Obtain a Form C and Offering Memorandum at https://wefunder.com/soundself

Former President Donald Trump has announced his intention to reclaim the Panama Canal, asserting that his administration has already taken steps toward this goal. His declaration has sparked global debate, as it challenges a decades-old agreement in which the United States ceded control of the strategic waterway to Panama. While Trump argues that Panama has violated the treaty governing the Canal, experts question whether such a move is legally or politically feasible. This article explores the historical context, legal implications, and geopolitical risks associated with Trump's claim.

Historical Context of the Panama Canal
The Panama Canal, a vital international trade route, was constructed under U.S. supervision between 1904 and 1914, with the U.S. investing approximately $375 million—over $11 billion in today’s currency. For decades, the U.S. controlled the Canal and its surrounding zone, but tensions over American dominance in Latin America led to growing opposition. In 1977, President Jimmy Carter signed a treaty agreeing to transfer control of the Canal to Panama, a decision that remains controversial among U.S. policymakers to this day. Trump has called this transfer a "big mistake" and now seeks to reverse it.

Trump’s Justification for Reclaiming the Canal
Trump and his administration argue that Panama has violated the 1977 treaty, which mandates the Canal remain permanently neutral and treat all nations equitably. A central claim is that China has exerted undue influence over the Canal’s operations, potentially compromising U.S. interests.

One key point of contention is the presence of Chinese investments in Panama, particularly through Hong Kong-based CK Hutchison, which has managed ports at both ends of the Canal. Although Panamanian authorities maintain full control over the Canal, the increasing involvement of Chinese firms in regional infrastructure projects has raised security concerns in Washington.

Trump also alleges that U.S. ships face unfair tolls compared to those of other nations, although Panama has denied this accusation. Furthermore, he asserts that because the U.S. originally built the Canal and remains one of its largest users, it has a rightful claim to its control.

The Role of U.S. Companies in the Canal’s Operations
Amid concerns over Chinese involvement, a major shift recently occurred when a consortium led by U.S. investment firm BlackRock acquired a majority stake in the ports previously run by CK Hutchison. This move places key Canal infrastructure under American corporate ownership, a development that may ease U.S. security concerns while allowing the Canal to remain under Panamanian control.

Potential U.S. Actions and Their Consequences
Trump’s administration has outlined several potential avenues for reclaiming the Canal, ranging from diplomatic negotiations to more aggressive measures. Secretary of State Marco Rubio has suggested that the U.S. could push for changes in Canal administration to limit Chinese influence. Panama has already responded by launching an audit of Hutchison’s operations and declining to renew its memorandum with China’s Belt and Road Initiative, signaling a shift toward closer U.S. alignment.

However, if these measures fail, Trump could pursue more drastic actions. Some experts suggest that a treaty violation could be used to justify military intervention under the treaty’s provisions. While Trump has downplayed the likelihood of deploying U.S. troops to Panama, he has not ruled it out entirely.

The alternative option—outright purchase—would require Panama’s agreement, which remains highly unlikely. The Canal is a source of national pride for Panamanians, and any attempt to sell it back to the U.S. would likely face fierce domestic opposition.

Geopolitical and Economic Risks
Trump’s push to reclaim the Canal could strain U.S.-Panama relations and fuel broader tensions in Latin America. Historically, U.S. involvement in the region has been met with accusations of imperialism, and a unilateral attempt to take control of the Canal could spark backlash.

China, which has significant investments in Panama and throughout Latin America, would likely view any U.S. action as a direct challenge to its influence. Given that China is a major trading partner for many Latin American countries, any escalation could disrupt diplomatic and economic relationships.

Additionally, U.S. allies might not support a confrontational approach. While some policymakers agree that Chinese expansion in the region poses security risks, others argue that strong-arm tactics could undermine efforts to build cooperative relationships in Latin America.

Conclusion: What’s Next?
Trump’s ambition to reclaim the Panama Canal remains a contentious issue with far-reaching implications. While concerns over China’s influence in the region are legitimate, the approach the U.S. takes will determine whether it strengthens or weakens its position in Latin America. A diplomatic path that encourages U.S. investment in Panama’s infrastructure may be more viable than aggressive intervention.

Ultimately, the future of the Canal’s governance will depend on Panama’s willingness to cooperate and the ability of U.S. policymakers to balance national security interests with international diplomacy. Whether Trump can successfully reclaim the Canal—or whether his threats will remain rhetoric—remains to be seen.