The Panama Canal, an 82-kilometer (51-mile) waterway, serves as a critical link between the Atlantic and Pacific oceans. Built and owned by the United States in the early 1900s, the canal was transferred to Panama in 1977 under a treaty that ensured its neutrality. This agreement has come under scrutiny as discussions about foreign influence over the canal, particularly by China, have intensified. Recently, former U.S. President Donald Trump asserted that China is operating the Panama Canal and described the transfer to Panama as a "foolish gift." However, evidence suggests otherwise.
The Panama Canal is operated by the Panama Canal Authority, with the United States remaining its largest user, responsible for approximately three-quarters of the cargo that transits through annually. China follows as a distant second in terms of cargo usage. While there are five ports adjacent to the canal, some owned by foreign companies including those from the U.S., the concern arises from a 1996 decision. Panama granted Hutchison-Whampoa, a Hong Kong company, a concession to operate the Balboa and Cristobal ports.
“China does not participate in the management and operation of the canal and has never interfered in the affairs of the canal.” – Mao Ning, China's foreign ministry spokeswoman
In 1999, the U.S. State Department conducted extensive research into this arrangement and found no evidence of Chinese control over the Panama Canal. The contract between Panama and Hutchison-Whampoa was purely operational, allowing the company to manage the ports without ownership rights. Despite this, some U.S. officials and analysts have expressed concerns about Chinese influence due to Hutchison-Whampoa's presence.
Panama joined China's "Belt and Road" initiative in 2017, a move linked to Beijing's geopolitical diplomacy and investment strategy. This connection has fueled speculation about China's potential influence over the canal. Nonetheless, Panamanian President Jose Raul Mulino has consistently denied any foreign control, emphasizing Panama’s commitment to neutrality.
“The canal is and will remain Panama’s” – Jose Raul Mulino, Panamanian president
In 2021, Panama extended Hutchison Ports PPC's operating agreement by 25 years, reinforcing its role as an operator. This extension has been met with mixed reactions. While some view it as a routine business decision, others interpret it as a strategic move in geopolitical maneuvering.
“We remain steadfast in our commitment to comply with all laws and regulations, fully exercising our contractual responsibilities” – Hutchison Ports PPC
Trump's remarks have reignited debates over control of the canal. His assertions have been viewed by some experts as attempts to sway public perception or distract from other issues.
“He [Trump] is definitely trying to frighten Panama,” – Natasha Lindstaedt, University of Essex international relations expert
“This is a negotiation tool or a distraction, or both” – Natasha Lindstaedt, University of Essex international relations expert
Despite these concerns, Panamanian officials maintain that their operations adhere to principles of neutrality and sovereign control.
“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.” – Donald Trump
“China is based at both ends of the Panama Canal” – Donald Trump