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The Panama Canal: A Historic Turning Point
In January 2024, on the 60th anniversary of the protests that rocked Panama, the country paid tribute to those who had died fighting for their sovereignty. In the midst of this reflective occasion, a storm was brewing on the international stage as former U.S. President Donald J. Trump made fiery claims regarding the Panama Canal. He suggested, inaccurately, that China controlled the canal, even hinting at the possibility of military action to retake it.
Panama, however, stood firm. President José Raúl Mulino, addressing the crowd at the commemorative ceremony, emphasized unequivocally, “The canal is and will continue to be Panamanian.” His comments resonated deeply, especially with those like Carlos E. Bonilla Cacó—whose brother had sacrificed his life during the 1964 protests. “My brother did not die for nothing,” Cacó declared, underscoring Panama’s long struggle to reclaim its sovereignty.
These remarks from Panamanian leaders were not just about pride but aimed squarely at Trump’s rhetoric, which seemed less rooted in fact and more in political posturing.
The Canal’s Political Chessboard: Trump, Panama, and China
Here’s the backdrop to the controversy: the Panama Canal, initially built by the United States in the early 20th century, became a cornerstone of global trade routes. However, in 1999 its ownership transitioned entirely to Panama, marking a milestone in its sovereignty. Since then, the Panama Canal Authority has been at the helm, transforming the legendary waterway into a globally admired economic engine.
But Trump’s remarks reignited historical tensions, and analysts speculated on the motivations behind his statements. Was Trump genuinely worried about Chinese influence in the region? Or, as some experts argued, was this a negotiating tactic aiming to press Panama into lowering fees on American goods passing through the canal?
One thing was clear, though: subtlety was not Trump’s strong suit, and his incendiary comments risked alienating Panama at a critical juncture. Ramon Escobar, a former White House National Security Council member, summed it up best: “Trump’s saber-rattling could dampen the Panamanian government’s desire to broaden ties with the U.S. economically.”
This diplomatic friction came at a time when China was actively courting Panama. Over the last decade, Beijing has worked to expand its influence across Latin America, positioning itself as an alternative to American dominance. With its extensive investments in global infrastructure—under the ambitious Belt and Road Initiative—China has made inroads around the Panama Canal, including two key seaports operated by a Hong Kong-based conglomerate, CK Hutchison Holdings.
For China, the Panama Canal is both a strategic gem and a symbol of its growing geopolitical clout. But while U.S. officials question Beijing’s motives, Panamanian leaders argue that fears of Chinese interference are exaggerated. As Ilya Espino de Marotta, the deputy administrator of the canal, explained, “The canal runs along national roads and is open to public view. Any meddling from China would be highly visible.”
Trump’s Missed Opportunities
Trump’s fixation on the canal wasn’t entirely new. During his previous presidency, he reportedly griped behind closed doors about events surrounding the waterway. According to John Feeley, a former U.S. ambassador to Panama, Trump had once complained that the U.S. Navy was being overcharged—a laughable claim given the $1 million fee was essentially a small footnote in the Pentagon’s massive defense budget.
Yet, despite these occasional outbursts, Trump never seriously addressed the bigger picture: China’s growing presence not only in Panama but across Latin America. This oversight happened even as Panama pivoted dramatically during the tenure of then-President Juan Carlos Varela, shifting its diplomatic recognition from Taiwan to Beijing—a move that deepened bilateral relations with China.
At the time, China dangled large-scale infrastructure investments as part of its Belt and Road Initiative, promising to fund megaprojects such as a bridge over the canal. Feeley recounted his attempts to encourage U.S. companies to bid on these projects, hoping to counter China’s influence. But without active support from Washington, his efforts stalled. “It’s not that we are losing to China,” Feeley remarked bitterly. “In most cases, we aren’t even showing up to the commercial battlefield.”
This absence has left Panama—and much of Latin America—with no choice but to turn to China or other global players when seeking critical investments. Giulia de Sanctis, president of the Panamanian Association of Business Executives, encapsulated Panama’s dilemma: “The U.S. isn’t bidding on big infrastructure projects here, but China is. Are we supposed to tell them: ‘Get out of Panama because Trump doesn’t like you?’ Would anyone feel safe investing here?”
The Canal’s Sovereignty and Modern Identity
It’s worth remembering just how far Panama has come since it gained control of the canal in 1999. Over the last two decades, the Panama Canal Authority has poured more than $5 billion into expanding the waterway, enabling it to handle the monumental cargo ships that dominate global trade today. The canal now plays a pivotal role in connecting East Asia and the United States.
What’s perhaps most remarkable is how Panama has built a thriving enterprise by staying resolutely neutral. As Espino de Marotta pointed out, “Our neutrality is our greatest business asset. It enables us to be a route for global commerce without interference.” The ports around the canal are operated by various companies from Hong Kong, Taiwan, and the U.S.—a testament to Panama’s diplomatic balancing act.
Still, this neutral stance hasn’t insulated Panama from the tug-of-war between great powers. For instance, while the bridge project China promised to fund has been paused and free-trade agreements with Beijing have cooled, many fear Panama remains vulnerable to geopolitical pressures. Ramón Martínez, a former Panamanian commerce minister, reflected on the situation, stating firmly, “For Panama, our most important ally will always be the United States.”
A Somber Reminder of Panama’s Struggles
Against this geopolitical backdrop, the anniversary of the 1964 riots served as a poignant reminder of Panama’s hard-fought struggle for sovereignty. The historic protests—sparked when Panamanian students attempted to raise their national flag in the U.S.-occupied canal zone—led to violent clashes that left numerous Panamanians dead. Yet, it also ignited the movement that eventually secured full control of the canal for Panama.
For those who gathered to honor the legacy of those protests, Trump’s rhetoric was hard to ignore. Jacqueline Williams, a visitor from New York, voiced her dismay while witnessing the canal’s grandeur firsthand. “At first, I laughed at the insanity of Trump’s remarks,” she admitted. “But then you think about his love for authoritarian figures like Putin, and it stops being funny.”
The Bigger Picture
The Panama Canal remains as much an engineering marvel as it is a symbol of resilience. Panama has not only taken charge of this vital trade artery but also turned it into a linchpin of global commerce. However, balancing its economic interests while remaining neutral in an ever-polarized world is no easy feat.
Trump’s saber-rattling, Beijing’s dangling investments, and the ghosts of a colonial past all converge to remind us that the Panama Canal will remain more than just a route for ships; it’s a route through history, power struggles, and the fight for sovereignty. As the world looks to Panama, the little nation with a global waterway firmly under its control, one thing remains clear—it’s not just a canal; it’s a testament to independence.
