Trump's Claims on the Panama Canal's Control by China: A Misunderstanding

Contrary to Trump's statements suggesting China's control over the Panama Canal, officials emphasize that the canal is genuinely administered by the Panama Canal Authority. While China is a major user and investor in adjacent ports, this does not equate to operational control or ownership of the canal itself.

During his inaugural address, former President Donald Trump made headlines by claiming that China operates the Panama Canal, an assertion that has raised eyebrows among officials both in the U.S. and Panama. "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," Trump stated, sparking concerns over his understanding of the canal's administration.

Stretching 51 miles across Central America, the Panama Canal serves as a crucial junction linking the Atlantic and Pacific Oceans, with around 14,000 vessels traversing it annually. Despite Trump's insistence, Panamanian President José Raúl Mulino has repeatedly clarified that there is no Chinese military presence in the canal and emphasized that it is under the jurisdiction of the Panama Canal Authority, a governmental body of Panama.

This isn't the first time Trump has vocalized his concerns about the canal. On Christmas Day, he claimed that "wonderful soldiers of China" were "illegally" operating the canal, which was promptly dismissed by Panamanian and Chinese officials as nonsensical.

Trump has also threatened military action to reclaim control over the canal, citing so-called exorbitant fees for U.S. ships, another assertion labeled as inaccurate by Panamanian authorities.

Historically, the U.S. was influential in both the construction and administration of the canal, which was completed in 1914. Control was formally passed to Panama with treaties signed in 1977 during Jimmy Carter's presidency, rendering the Panama Canal Authority the sole operator since 1999.

While Trump’s claims indicate a misunderstanding of the current geopolitical landscape, they resonate with concerns among U.S. officials regarding China's significant investments in nearby terminal facilities. During the 2023-2024 period, China comprised 21.4% of the canal's cargo volume, highlighting its position as the second-largest user after the U.S.

Chinese companies have indeed enhanced their presence since the canal's privatization, including operating two major ports adjacent to it. However, these operations are run by a subsidiary of Hutchison Port Holdings—not the Chinese government—leading experts like Ryan Berg to differentiate between operational management and direct control.

China's strategic investments in Panama, including development of a cruise terminal and infrastructure projects linked to the Belt and Road Initiative, are part of a broader effort to strengthen ties in Latin America, traditionally viewed as U.S. territory. Despite these interests, Panamanian officials continue to reaffirm their independence in managing the canal, resisting claims of foreign control, particularly from the U.S.