Protecting America’s Vital Interest: Why the Panama Canal Must Remain Free From Communist China’s Influence

The Panama Canal is of vital national interest to the United States. Unfortunately, poor management from the Panamanians and malign actions by the Chinese Communist Party (CCP) threaten those interests, making it right for President Donald Trump to demand bold action.  The CCP’s efforts to weaken America are global; they are within our own hemisphere, and they are even within our own borders. The Trump Administration must take steps – both at home and abroad – to push back on CCP aggression. This includes the Panama Canal – a vital strategic trade and military artery that the United States built more than a century ago. 

A compromised Panama Canal would both devastate the U.S. economy and put our national security at risk. First, we should not believe the lies of the media – or the Chinese Communist Party – which cast President Trump’s interest in the Panama Canal as some sort of ugly imperialist vision. The truth is that the canal’s free and open status is essential to the future of the United States. America’s relationship with Panama stretches back more than a century, when the country first gained independence from Colombia in 1903 with American support. The Panama Canal, built by the United States over the following decade, carried great financial benefits for Panama, solidified U.S. ties with the nation, and benefits the entire world to this day. The United States managed this essential trade artery for decades, until President Jimmy Carter signed a treaty handing control of the canal to the Panamanian government. 

Relinquishing control of the canal, upon which global commerce now depends, may have seemed the right course of action for the Carter Administration at the time, but it has since introduced complications to vital American interests. Some of these were foreseen by the Carter Administration, which stipulated that transit fees imposed by the Panamanian government be “just, reasonable, equitable, and consistent with the principles of international law,” while the United States retained the right to intervene to keep the canal open, should any threat to the canal’s function materialize. 

Unfortunately, the state of both these conditions merits America’s involvement. In response to droughts over the past two years, Panama’s government has sharply raised transit fees for vessels using the canal, a financial hit that raises prices on goods for all Americans. American families are already dealing with the Biden Administration’s historic inflation; there are better ways to resolve these kinds of issues without raising prices further. President Trump is right to hold the Panamanian government’s feet to the fire over this. After all, we built the canal.

More concerningly, the canal’s integrity as a neutral, safe waterway for shipping traffic is now threatened by the encroachment of the CCP, both in Panama and throughout the Western Hemisphere. Through its Belt and Road Initiative, the CCP has induced debt and dependence within developing nations around the world, and this threat is absolutely developing in Panama. Indeed, Panama was the first nation in our hemisphere to sign on to Beijing’s trap – something I warned its leaders about as Secretary of State in 2018. These concerns were, unfortunately, well-founded and prescient. Chinese companies now operate ports at both ends of the canal, the CCP is building a $1.3 billion bridge that will traverse the waterway, and Panama’s government owes China $8 billion in debt – mostly due to the infrastructure projects developed by China within the country. Panama should never have made these deals that now threaten its sovereignty and freedom. 

This has created very real threats, not only to the canal itself but to vital U.S. goods being shipped through it. Every ship in the Atlantic bound for the Pacific traverses the canal and vice versa. Think of the advantage China would possess in a potential invasion of Taiwan – or a broader conflict spanning East Asia – if it could effectively shut down the most efficient route for American naval vessels needing to cross into the Pacific, either to reinforce or resupply American forces and that of our allies.

Anyone who underestimates this threat should consider what has already happened to other nations that fell into Beijing’s debt traps. Sri Lanka’s economy is in shambles, and it handed over a 99-year lease of its vital Hambantota Port in 2017 after falling behind on BRI debt payments. Thousands of cracks are already present in a dam built in Ecuador as part of the BRI initiative – which can’t even function at half its intended capacity – while Ecuador’s government is paying off its massive debt in deeply discounted oil exports it cannot afford. In just the Western Hemisphere alone, similar stories can be found in Venezuela, Bolivia, Ecuador, Colombia, and Peru. Panama cannot join this list. President Trump is right to take proactive measures to ensure the Panama Canal does not fall under the influence of the CCP and remains free and open – for America and the entire world to use.