China’s rising power and the immigration crisis are both central issues for the US, issues on which President Donald J. Trump has campaigned heavily. The Panama Canal lies at an intersection of these two issues, at least according to Trump’s administration.
In his inaugural address on January 20, President Donald J. Trump stated that “China is operating the Panama Canal”, and that “we’re taking it back”. When questioned further, he refused to rule out the possibility of military force. He also accused Panama of overcharging US ships. Since last Sunday, US Secretary of State Marco Rubio has been attempting to pressure Jose Raul Mulino, the president of Panama, into getting rid of Chinese influence in the Panama Canal. Mulino (as well as the Chinese government) remained adamant that Panama remains completely in control of the canal, and he has refused to negotiate any possibility of handing it over to the US. However, he has agreed to negotiate migration issues, and has agreed to send migrants crossing the Darién Gap back to their country of origin.
Trump’s legal argument centers around the original treaty with Panama regarding the Panama Canal. Historically, unrest in Panama over sovereignty of the Panama Canal Zone prompted the liberal administrations of the 60s and 70s to arrange the gradual return of the canal to Panama, with the critical condition being that the canal must be operated neutrally as an international waterway. Trump claims that this neutrality is being violated as Panama is influenced by China, and US ships are being overcharged, though his administration’s push to give US vessels priority in the canal implies that his version of neutrality involves some preferential treatment for the US. Indeed, he denounces the treaty in his inauguration speech, calling it a “foolish gift that should have never been made”.
While Trump’s exact words regarding the Panama Canal may be somewhat of an exaggeration, China’s growing influence in the canal is a reasonable cause for concern. A Hong Kong-based private company operates the Balboa and Cristobal ports, each located at opposite ends of the Panama Canal. Other Chinese companies, some owned by the Chinese government, have also made investments tied to the canal like bridges, cruise docks, and even electricity. This is not just limited to private companies; the governments of Panama and China currently have close economic ties. Panama is a member of China’s Belt and Road Initiative, which is a program with a quid-pro-quo philosophy: China invests in the economic growth of developing countries, and in return those countries have ties to China. To address this concern, Mulino also conceded that Panama would pull out of Belt and Road upon the expiration of their current agreement.
Some experts, such as Professor Andrew Thomas, point out that these ports do not actually allow China to control the Panama Canal, because the agency that controls the canal is a Panamanian government agency and therefore independent of Chinese influence. However, Ryan Berg, who leads the Center for Strategic and International Studies, stated that China’s presence in the Panama Canal would give them knowledge of US cargo, which might become a strategic advantage in the event of a “supply chain war”–basically, when two countries stop exporting to each other to hurt the other country’s economy.
Dr. Jorgensen, who is the IB Global Politics teacher at C&SH and is always caught up on current events, speculates that Trump isn’t really fighting for neutrality of the canal, but rather is trying to protect America’s own interests from an offensive realist perspective; essentially, he believes that America’s safety depends on its control over its neighbors. What Trump may be preparing for–or, arguably, what is already beginning to happen–is a standoff with China over global connections, like a second Cold War. Over 150 countries have signed onto China’s Belt and Road Initiative. Previous administrations have attempted to address this issue. For example, Biden’s administration tried to contest China’s program through its own investments, particularly regarding the construction of a railroad in Angola.
Also important to note is the political significance of the Panama Canal. You probably never heard of any railroad in Angola, but the Panama Canal is viewed as one of the greatest American accomplishments, a feat of engineering and vision and sacrifice. A true politician is concerned less with the truth of their claims and more with their appeal to voters, and Trump’s call to retake the Panama Canal is a textbook example of appealing to strong nationalist sentiments. It actually mirrors what Ronald Reagan did in the 1980s, when the original treaty with Panama was still being discussed; by staunchly opposing the treaty, he was able to turn his campaign around and skyrocket his approval rating.
Whatever Trump’s real intentions are, he is very openly signaling that he does not plan on being friendly, whether he’s dealing with a historic US ally such as Panama or one of the US’s biggest rivals, China. His diplomacy is assertive, loud, and hopefully effective.