Trump renews threat to take back Panama Canal

Rachel Oswald, CQ-Roll Call on Jan 20, 2025

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WASHINGTON — President Donald Trump used his second inaugural address to repeat criticisms of Panama and its operation of the Panama Canal and to threaten to take back control of the waterway through which much U.S. trade passes.

“We have been treated very badly from this foolish gift that should have never been made and Panama’s promise to us has been broken,” Trump said from the Capitol Rotunda. “The purpose of our deal and the spirit of our treaty has been totally violated.”

It remains unclear whether Trump will follow his rhetoric with any executive action to put teeth into his threat to take back control of the canal, and if any potential actions would be legally focused or use things like increased foreign aid and security assistance to try to reduce Beijing’s influence in Panama City.

The U.S. built the Panama Canal and controlled the crucial maritime and logistics trade hub from 1914-1999, at which time Washington handed over administration and operation of the canal to Panama in accordance with the terms of the 1977 Torrijos-Carter treaties.

Under one of those accords, known as the Neutrality Treaty, the two countries agreed the canal would be permanently neutral and open to ships from all countries and on equal terms. While Panama is responsible for defending the canal, the U.S. maintains the right to militarily defend the canal’s neutrality, including by reopening the canal and restoring its operations.

Trump alleged that China is now acting as the operator of the Panama Canal.

“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,” he said in his speech.

The Panama Canal Authority, an independent entity of the Panamanian government, administers and operates the canal.

But the presence of Chinese state-owned ports at both ends of the 50-mile-long canal has raised fears in some corners of Washington that the Chinese military could take over those businesses and in a time of potential conflict with the U.S. use them to choke off ship traffic.

“This is a very legitimate issue that we face there,” Sen. Marco Rubio, R-Fla., said of concerns about Chinese influence over Panama at his Jan. 15 Senate Foreign Relations Committee confirmation hearing to be secretary of State.

But the Florida lawmaker, whose nomination was approved by the committee late Monday afternoon, said he didn’t feel ready to talk in depth about the concerns before he had familiarized himself with the legal research surrounding it.

“I’m compelled to suspect that an argument could be made that the terms under which that canal were turned over have been violated because while technically sovereignty over the canal has not been turned over to a foreign power, in reality, a foreign power today possesses, through their companies, which we know are not independent, the ability to turn the canal into a choke point in a moment of conflict, and that is a direct threat to the national interest and security of the United States,” Rubio told his former Senate committee colleagues.

The Biden administration was dismissive about Trump’s focus on the Panama Canal issue.

“On the Panama Canal, we have a treaty, we have a settled policy of many years,” outgoing Secretary of State Antony J. Blinken said at his final press conference on Jan. 16. “And that’s not going to change. And as I’ve said before, I think it doesn’t warrant spending a lot of time talking about it.”

Rather than focusing on taking back the Panama Canal, Blinken said the Trump administration should prioritize fostering greater diversity in U.S. supply chains.

The U.S. remains by far the biggest user of the canal, with roughly three-quarters of ship traffic through the waterway originating from or destined for the U.S., according to official canal statistics. China is the second-largest user, making up some 21 percent of comparable ship traffic.

Panama deepened its ties to China in the last decade. In 2017, Panama switched its diplomatic recognition from Taiwan to China. That same year, the Central American country became the first Latin American nation to join Beijing’s Belt and Road international development initiative, according to a 2024 report on the country by the Congressional Research Service.

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