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Will Donald Trump Retake the Panama Canal?

Block III F/A-18 Super Hornet. Image Credit: Creative Commons.
An F/A-18F Super Hornet Strike Fighter Squadron 103 is parked on the flight deck of the aircraft carrier USS Dwight D. Eisenhower (CVN 69) as the ship operates in the Arabian Sea on Dec. 5, 2006. The Eisenhower is in the Arabian Sea in support of maritime security operations.

Key Points and Summary: President Donald Trump has reignited controversy by suggesting U.S. control over the Panama Canal should be reclaimed, citing alleged unfair treatment of U.S. ships and Chinese influence. While U.S. treaty obligations ensure the Canal’s neutrality and prioritize U.S. defense, Trump’s rhetoric risks alienating Panama and the broader Latin American region.

-Military leverage could force Panama’s compliance, but experts agree the U.S. already holds immense influence without needing direct control.

-Escalating tensions with Panama could fracture long-standing regional stability, encouraging Latin American nations to seek external allies. Diplomatic collaboration, not intimidation, remains the best path for securing U.S. interests.

Trump’s Panama Canal Claims: A Diplomatic Ticking Time Bomb?

President Donald Trump is once again talking about taking control of the Panama Canal away from Panama. In his inaugural address, Trump declared that the Panamanians had mistreated US ships and that they had, in effect, given control of the Canal to the Chinese. 

These claims have confused US foreign policy watchers and consternation in Panama. How seriously should we take Trump’s claims, and should the Panamanians be worried?

Donald Trump’s Panama Canal Claims, Explained 

To begin with, while it is true that Chinese investment in Panama is significant and several Chinese firms support Canal operations, Trump’s claims are complete nonsense.

US Navy ships have priority for use of the Canal, and most traffic through Panama comes from or is destined for US ports.

US ships must pay fees to use the Canal, but these fees are not as significant as driving traffic to other routes. Moreover, US treaty obligations with Panama ensure the Canal’s neutrality and reserve rights of defense to the US in case of military threats.

However, reality does not constrain Trump, and consequently, Panama has reasons to worry.

First things first: Panama’s military forces are inconsequential. The United States can seize the Canal Zone without significant difficulty. If President Trump were to order a re-occupation of the Canal Zone, Panamanian forces might feel compelled to resist out of a sense of national honor.

Still, such resistance would not affect the outcome of the operation.

What Could Happen over Panama Canal 

It is possible that this military leverage, combined with a general diplomatic offensive, could force Panama to accede to certain US demands, although it’s unclear at this point what those demands might be. More importantly, there is nothing that the United States can do with formal control of the Panama Canal that it cannot do by leaving the Canal under the nominal control of the Panamanian government.

The US has immense influence in Panama, total control of the approaches to the Canal, and complete military dominance in the region. The idea that China could use the Canal Zone as a military outpost is beyond silly.

Even the idea that China could leverage commercial connections to gain useful intelligence regarding the operation of the Canal is far-fetched. The Canal is, after all, largely operated in the open.  These facts were evident in the 1970s when President Jimmy Carter agreed to transfer the Canal to formal Panamanian control.

The Bigger Issue for Donald Trump 

More broadly, the relative quiet that the United States has enjoyed in the Western hemisphere for the last century is critical to American national security.

As the cases of China and especially Russia should make obvious, there is tremendous danger in having neighbors who are so frightened of you that they seek friends across the sea to protect their security.

Latin American countries may not all be like the United States, but with only a few exceptions, they are willing to tolerate US leadership. The best way to ensure that Latin America remains friendly to US interests is to ensure that Latin American governments and civil society are comfortable within a US-led international order.

The Trump administration has threatened to upend this good fortune to no particular purpose, including triggering what may be an unnecessary trade war with Mexico and Canada while also threatening direct kinetic action against Mexican drug cartels.

Adding to this, a pointless conflict with Panama, which would reopen old wounds across the region, would be the height of diplomatic malpractice. If the United States wants to ensure that Latin American countries begin to look abroad for security assistance and security guarantees, it could do no worse than militarized intimidation of a long-time ally like Panama. 

U.S. Navy Aircraft Carrier

The aircraft carrier USS Ronald Reagan (CVN 76) sails alongside amphibious assault carrier USS Tripoli (LHA 7) during a photo exercise for Valiant Shield 2022, June 12, 2022. Exercises like VS22 allow forces across the Indo-Pacific the opportunity to integrate Navy, Marine Corps, Army, Air Force and Space Force to train in precise, lethal, and overwhelming multi-axis, multi-domain effects that demonstrate the strength and versatility of the Joint Force. Tripoli is operating in the U.S. 7th Fleet area of operations to enhance interoperability with allies and partners and serve as a ready response force to defend peace and maintain stability in the Indo-Pacific region. (U.S. Navy photo by Mass Communication Specialist 1st Class Peter Burghart)

It is not evident that Trump understands these costs. It seems unlikely that those around him who understand the costs will raise their voices against his ideas.

If Trump needs to be reassured as to the future of the Canal, he can work with the existing (friendly) Panamanian government to assess vulnerabilities and increase US investment.

Unfortunately, Trump’s rhetoric is unlikely to keep the Panamanian government friendly for long and may lead to significant diplomatic problems across the region. 

About the Author: Dr. Robert Farley 

Dr. Robert Farley has taught security and diplomacy courses at the Patterson School since 2005. He received his BS from the University of Oregon in 1997, and his Ph. D. from the University of Washington in 2004. Dr. Farley is the author of Grounded: The Case for Abolishing the United States Air Force (University Press of Kentucky, 2014), the Battleship Book (Wildside, 2016), Patents for Power: Intellectual Property Law and the Diffusion of Military Technology (University of Chicago, 2020), and most recently Waging War with Gold: National Security and the Finance Domain Across the Ages (Lynne Rienner, 2023). He has contributed extensively to a number of journals and magazines, including the National Interest, the Diplomat: APAC, World Politics Review, and the American Prospect. Dr. Farley is also a founder and senior editor of Lawyers, Guns and Money.

Written By

Dr. Robert Farley has taught security and diplomacy courses at the Patterson School since 2005. He received his BS from the University of Oregon in 1997, and his Ph.D. from the University of Washington in 2004. Dr. Farley is the author of Grounded: The Case for Abolishing the United States Air Force (University Press of Kentucky, 2014), the Battleship Book (Wildside, 2016), and Patents for Power: Intellectual Property Law and the Diffusion of Military Technology (University of Chicago, 2020). He has contributed extensively to a number of journals and magazines, including the National Interest, the Diplomat: APAC, World Politics Review, and the American Prospect. Dr. Farley is also a founder and senior editor of Lawyers, Guns and Money.

3 Comments

3 Comments

  1. bobb

    January 22, 2025 at 9:29 am

    Sixty-forty.

    That is it’s 1.5 times greater for trump to head over to panama and wrest back the canal than for trump to doing nothing about it.

    Why.

    The canal is crucial to US naval traffic and being ripped off every time for using it is completely anathema to trump.

    Probably trump will focus on the panama canal only after solving the ukraine conflict.

    So, shades of december 1999 ?

    Thus year, december 2025. Yes.

    That means the panama military now has a small window of opportunity to fully prepare for the upcoming ‘invasion’ or will it just chicken out when the first GIs or USMC arrive.

    Think of operation citadel july 1943. The soviets snatched delirious victory from the jaws of defeat.

  2. RequestBeingVerified

    January 22, 2025 at 10:44 am

    Bush the elder invaded panama in december 1989 after the panama strongman thumbed his nose at bush, so perhaps the time has come for the US military to revisit the place.

    It has been over 35 years US soldiers last left panama, the urge to go prowling old haunts is getting stronger and stronger and 2025 could finally see the camel’s back cracking from the latest canal passage fees.

    If there is any invasion, it will be over in a matter of days. The media will trip over each other trying to get embedded with the first wave of forward advancing troops.

  3. CrenshawForever

    January 24, 2025 at 1:52 pm

    Farley is a genius and these other comments are silly. There’s no evidence the US is facing any especially high or unreasonable canal fees. Most ships that pass through aren’t even US-flagged. Just folks urging on a war over nothing. Again.

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