“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,” said Donald Trump during his inaugural address, doubling down on a claim that stirred controversy and confusion. But does China truly control this vital waterway, or is the assertion far from reality?
The Panama Canal, stretching 51 miles (82 kilometers) across Central America, is a critical maritime shortcut connecting the Atlantic and Pacific oceans. Handling about 14,000 ships annually, it plays a significant role in global trade. Yet, Trump’s statement has sparked renewed debate over who really runs this strategic waterway.
What Has Trump Said About the Canal?
Trump’s focus on the Panama Canal isn’t new. On Christmas Day, he claimed on social media that “wonderful soldiers of China” were “illegally operating the Panama Canal.” The assertion was swiftly dismissed by Panamanian and Chinese officials. Panamanian President José Raúl Mulino called it “nonsense,” emphasizing that no foreign nation interferes in the canal’s operations.
Despite these denials, Trump has threatened to “take back” the canal, citing alleged exorbitant fees imposed on U.S. vessels—claims Panamanian authorities firmly reject. The canal is managed by the Panama Canal Authority, a Panamanian government agency, not Chinese soldiers or entities.
U.S. History with the Panama Canal
The U.S. played a pivotal role in the canal’s construction, which was completed in 1914 after a failed French attempt. It remained under U.S. control until 1999, following a treaty signed by President Jimmy Carter to transfer authority to Panama. Since then, the canal has been operated exclusively by the Panamanian government, which ensures its neutrality.
China’s Role: Fact or Fiction?
While there is no evidence to suggest that China controls the canal itself, Chinese companies have made significant investments in the surrounding infrastructure. For instance, two major ports near the canal—Balboa and Cristóbal—are operated by Hutchison Port Holdings, a Hong Kong-based company. This has led to speculation about potential Chinese influence in the region.
Moreover, China has become the second-largest user of the canal, accounting for 21.4% of its cargo volume from October 2023 to September 2024. Chinese investments in Panama also include infrastructure projects like a cruise terminal, a bridge, and other developments under China’s Belt and Road Initiative.
The Bigger Picture: Geopolitical Tensions
China’s growing presence in Panama is part of a broader push to expand its influence in Latin America. In 2017, Panama shifted diplomatic ties from Taiwan to Beijing, becoming the first Latin American country to join China’s Belt and Road Initiative. This move has raised eyebrows in Washington, especially given the strategic importance of the canal for global trade.
While Trump’s claim of Chinese soldiers operating the canal is inaccurate, it reflects broader concerns about Beijing’s rising economic and geopolitical footprint in the region. The debate over China’s influence in the Panama Canal underscores the ongoing rivalry between the world’s two largest economies.
For now, the Panama Canal remains under Panamanian control, but the complex interplay of economic interests and geopolitical strategies keeps this vital waterway at the center of global attention.
