Why Is Trump Concerned About the Panama Canal?

The Panama Canal is in the current news cycle due to comments made by President-elect Donald Trump. However, the canal has a long history that “dates back to 1513, when the Spanish conquistador Vasco Nunez de Balboa first crossed ethe Isthmus of Panama.” 

Europeans considered “the possibility to dig a water passage between the Atlantic and Pacific Oceans across this narrow land bridge between North and South America.” Several proposals were considered between the sixteenth and nineteenth centuries.

France was the first nation to attempt to build a canal. Ferdinand de Lesseps built the Suez Canal (1859-1869) and led the first attempt (1880-1889) “to build a sea-level canal.”

… A concession to build the canal was obtained from the Colombian government, at that time the possessor of the Panama Isthmus. The canal was only partly completed, as a result of the severe underestimation of the difficulties in excavating the rugged terrain, heavy personnel losses to tropical diseases, and increasing difficulties in raising finances. The collapse of the French canal company (1889) was followed by a political scandal surrounding alleged corruption in the French government.

Interest in a U.S.-led canal effort developed in the late 1890s, and was considered a priority by President Theodore Roosevelt (1901-1909). Despite a longstanding preference in Congress and amongst the public for the Nicaragua route, Roosevelt was able to swing Congressional support to buy the French canal concession and equipment. After encountering resistance from the Colombian government to what they considered unfair terms, Roosevelt gave his support to a revolution in Panama and signed a treaty enabling the project with the new Panamanian government.

The Americans’ success hinged on two factors. First was converting the original French sea-level plan to a more realistic lock-controlled canal. The second was controlling the diseases which had decimated workers and management alike under the original French attempt…. [They recognized that mosquitoes played a role in the spread of diseases and focused on controlling them.]

On 7 January 1914, the French crane boat Alexandre La Valley became the first to traverse the entire length of the canal, and on 1 April 1914 the construction was officially completed with the hand-over of the project from the construction company to the Panama Canal Zone government. The outbreak of World War I caused the cancellation of any official “grand opening” celebration, but the canal officially opened to commercial traffic on 15 August 1914 with the transit of the SS Ancon.

During World War II, the canal proved vital to American military strategy, allowing ships to transfer easily between the Atlantic and Pacific. Politically, the canal remained a territory of the United States until 1977, when the Torrijos-Carter Treaties began the process of transferring territorial control of the Panama Canal Zone to Panama, a process which was finally completed on 31 December 1999.

The Panama Canal continues to be a viable commercial venture and a vital link in world shipping, and is periodically upgraded. A Panama Canal expansion project started construction in 2007 and began commercial operation on 26 June 2016. The new locks allow the transit of larger Post-Panamax and New Panamax ships, which have greater cargo capacity than the original locks could accommodate.

Debates about giving the Panama Canal to the Panamanian government took place in the 1970s. Ronald Reagan take on the idea was “We built it. We paid for it. It’s ours.” His actual words were: “We cannot abdicate our responsibility for the operations of the canal and the security of the Western Hemisphere.”

Congress narrowly voted with Jimmy Carter rather than Ronald Reagan. The U.S. Senate narrowly ratified two treaties – signed by then-President Jimmy Carter – with the Central American nation in 1977. However, Reagan won the 1980 election in a landslide because many Americans “were fed up with seemingly endless foreign-policy retreats and failures.”

Carter presided over a failed administration much like that of Joe Biden, so it is understandable that Reagan disagreed with his policies in much the same way that Donald Trump disagrees with the policies of Biden. Trump has already revived the issue of the Panama Canal, and Jarrett Stepman at The Heritage Foundation says that he is right to do it. Trump Is Right About Control of the Panama Canal

“The Panama Canal is considered a VITAL National Asset for the United States, due to its critical role to America’s Economy and National Security,” Trump wrote on Truth Social on Dec. 21. “A secure Panama Canal is crucial for U.S. Commerce, and rapid deployment of the Navy, from the Atlantic to the Pacific, and drastically cuts shipping times to U.S. ports.”

Trump then wrote that by the terms of a 1977 treaty, the canal was to be operated by Panama alone and not a foreign power, such as China. He then blasted the fees they’ve been charging, which he called “ridiculous.”

Of course, Democrats oppose Trump’s comments on the Panama Canal, and the President of Panama insists that China is not involved in running it. Like President Theodore Roosevelt, President Trump understands the importance of the Panama Canal to the United States. It is important for commercial and security reasons to link the Atlantic and Pacific oceans. The canal is also important to the United States because thousands of Americans died of disease during the construction of the canal. Besides, “Panama exists as a country because of the United States.”

When the U.S. gave up the rights to the canal in the 1970s, it did so for several reasons and with some notable stipulations. Americans didn’t want to be perceived as a colonial power and were wary of, for instance, when Egypt nationalized the Suez Canal in 1956 and triggered a war with Israel, France, and Great Britain….

On top of that, the treaties signed with Panama obligated the country to run the canal neutrally and without discriminatory pricing. The United States could intervene if that neutrality was ever broken.

While the canal has operated smoothly for the most part since the 1970s, things haven’t always gone smoothly. President George H. W. Bush launched a short and successful invasion of Panama in 1989 to depose Gen. Manuel Noriega, who had seized control of the country, refused to hold a fair election, turned Panama into a narco state, and was getting cozy with the Soviet Union.

More important for the modern state of Panama, a Hong King company purchased the Atlantic and Pacific ports of entry in 1996.

As Paul du Quenoy of the Palm Beach Freedom Institute wrote for the New York Post, the purchase appeared to violate the terms of the 1977 treaties, but they weren’t enforced. That’s likely because at the time Hong Kong was still a part of the British Empire and on friendly terms with the U.S.

That’s since changed.

“In 1997, Hong Kong reverted to Chinese communist rule – and despite its promise to preserve the former colony’s distinct political system for 50 years, Beijing has taken complete control there, du Quenoy wrote. “The Chinese Communist Party can exercise direct and possibly unlimited influence over any of Hong Kong’s companies, anywhere in the world.”

Panama renewed its deal with the Hong Kong company in 2021 and thus, du Quenoy wrote, “preserves de facto Chinese control over one of the world’s most vital conduits of maritime traffic.”

Not only that, but China also has made enormous investments in Panama, and many of its companies operate there. So, the operation of the Panama Canal is threatened in a way that it hasn’t been since the U.S. ceded control more than 40 years ago.

Theodore Roosevelt saw the value of a passage from the Atlantic to the Pacific ocean. Reagan warned about giving the Panama Canal away. Now Trump is bringing up the issue and making a big deal of it. Through his comments, “Trump clearly intends to move the focus of American foreign policy back toward the country’s interests in the Western Hemisphere.” Is he reviving a new kind of Monroe Doctrine?

Stepman noted that “Trump, and some of his more notable Cabinet picks, have signaled that they intend to focus on containing the rising power of communist China in Asia and the Pacific.” He also observed that China would present “a grave threat to the United States” if it could exert control over the Panama Canal.

When the Panama Canal experiences traffic jams and other slowdowns, it can cause significant damage to global supply chains. It certainly did last September.

Worse, imagine if there was a war that required U.S. and allied ships to cross form the Atlantic to the Pacific or vice versa and suddenly they were impeded from doing so?

At the end of the day, it doesn’t matter whether Panama’s president is angry or if The New York Times is aghast at Trump upsetting the international community. Trump understands that foreign relations is a lot more transactional and a good deal less theoretical than a college classroom discussion.

By putting the issue of the Panama Canal back in the news, he’s simply signaling that the U.S. is returning to the business of looking out for American interests first, and that those will always come before the feelings of foreign leaders or media critics.