Trump’s remarks on his Truth Social platform signal a rising apprehension about the canal’s oversight and its implications for U.S. national security. He emphasized, “The Panama Canal is a CRUCIAL National Asset for the United States, given its essential role in our Economy and National Security.”

The canal plays a pivotal role in global supply chains, with around 6% of worldwide maritime trade navigating its locks. Each year, approximately 40% of U.S. container traffic relies on this vital waterway, making the U.S. the largest user of the canal. In 2021, over 73% of vessels using the canal were traveling to or from American ports.

Opened in 1914 after an extensive construction project led by the U.S., the canal was transferred to Panamanian control in 1999 as part of the Torrijos-Carter Treaties. These agreements, forged during the Carter administration, have sparked ongoing debate among some U.S. lawmakers who view the handover as a strategic miscalculation.

The significant portion of trade that passes through the canal highlights its indispensable role in cutting down transit times between the Pacific and Atlantic Oceans, thus boosting the efficiency and competitiveness of American trade. This reliance indicates that any changes in control or disruptions could have serious consequences for the U.S. economy, especially for sectors that depend on timely and cost-effective shipping routes.

Trump’s statements extend beyond a critique of the 1999 transition; he has hinted at demanding full control of the canal if certain standards are not met. He remarked, “If the moral and legal principles of this generous transfer are not upheld, we will insist on the Panama Canal being returned to us, fully and without hesitation.” His concerns primarily focus on what he perceives as unfair treatment of U.S. interests, especially regarding the substantial fees imposed on American shipping.

This matter transcends mere financial considerations. Trump’s comments also reflect larger concerns about China’s growing influence in the region. Since Panama established diplomatic relations with China in place of Taiwan in 2017, Beijing has increased its economic involvement, undertaking significant infrastructure investments near the canal.

The U.S. Southern Command has expressed unease regarding these Chinese projects. General Laura Richardson has pointed out to a Senate committee that they may threaten American interests. China’s stake in ports at both ends of the canal, managed by Hutchison Ports PPC—a Hong Kong firm with close ties to Beijing—has raised alarms about China’s potential leverage over crucial logistical operations tied to the canal’s functionality.

This influence casts doubt on the canal’s neutrality, which is intended to be safeguarded by the Neutrality Treaty, ensuring equitable access for all nations. China’s participation, particularly in operating the ports of Balboa and Cristobal, could enable it to influence or manipulate canal operations, posing risks to U.S. trade that relies heavily on this route.

Furthermore, there are security concerns that China could introduce surveillance technology into the canal’s infrastructure, potentially monitoring U.S. naval and commercial movements. This risk of espionage increases strategic vulnerabilities, offering China valuable insights into American logistics and military activities.

Trump’s calls for reclaiming the canal would likely face substantial legal and diplomatic hurdles. The Neutrality Treaty, which is indefinite, obligates the U.S. to respect the canal’s neutrality, and any attempt to forcibly regain control would violate international law, jeopardizing U.S. relations in Latin America.

Since the handover, Panama has operated the canal effectively, even expanding it in 2016 to accommodate larger vessels, thereby doubling its capacity. Nevertheless, Trump’s statements highlight the enduring strategic significance of the canal to U.S. interests, underscoring the need for continued vigilance in ensuring secure and reliable access to this critical maritime corridor.

As geopolitical tensions shift, the Panama Canal is likely to remain a key element in U.S. foreign policy, demanding a careful balance between asserting American interests and honoring Panamanian sovereignty. The dynamics at play will continue to shape global trade routes, supply chain stability, and international relations in the region.