The Shadow
Panama Canal
U.S. foreign policy is bound for a transformation under President Trump.
After his election in November, many world leaders have established lines of communication with Trump.
Some even visited Mar-a-Lago with the then President-elect.
One issue gaining interest concerns the Panama Canal, which has operated since its opening in 1914.
France was an original sponsor in constructing a canal. A canal could pay immense dividends for trade and commerce in the region by drastically cutting distance and travel time from the Pacific Ocean to the Atlantic Ocean.
Otherwise, countries were subject to travelling around the continental mass of South America via the Strait of Magellan.
After a French effort went bankrupt and high mortality rates consumed the canal project, U.S. President Teddy Roosevelt advocated for United States involvement in constructing a canal in the region.
This was not the first time the United States had sought influence over infrastructure projects in the region.
In 1850, the United States helped develop the Panama Railroad.
A deal to give the canal project to the U.S. was put in place, but the Colombian government rejected the measure.
To circumvent the Colombian government, Roosevelt supported the separation of Panama from Colombia.
Although the Colombians sent troops in an attempt to thwart Panamanian rebels, U.S. troops were present in the area to support the rebels.
After recognizing the new Panamanian government, a treaty was signed with this new nation of Panama. The treaty granted rights to the United States to build and control the Panama Canal Zone and its defenses.
In May of 1904, the U.S. took formal control over the canal property. Through American engineering prowess and determination, the Panama project was completed in 1914.
The project was the single most expensive construction project in U.S. history at the time.
America later facilitated formal relations between Panama and Colombia as the U.S. continued its control over the territory encompassing the Panama Canal Zone.
American control over the territory lasted for decades.
Later, President Jimmy Carter negotiated a deal with the Panamanian government to cede control of the territory to Panama. While I disagreed with that policy decision, the one positive aspect of the Carter giveaway was that the country of Panama guaranteed that usage of the waterway would be permanently neutral.
Despite the shift in control over the waterway, traffic through the Panama Canal continues to grow. According to Panama Canal Authority sources, traffic through the canal in some years has exceeded 14,000 ships.
BBC reports that between October 2023 and September 2024, China accounted for 21.4% of the cargo volume transiting the Panama Canal, making it the second-largest user after the US.
We see private and state-owned Chinese investments in infrastructure projects like ports and terminals, including those in the Panama Canal, springing up all over the world. Landbridge Group and CK Hutchison, a Hong-Kong based company, operate some of these ports.
Chinese companies now control ports at both ends of the canal.
Chinese national security laws require private companies within their jurisdiction to assist in intelligence gathering or military operations.
These ports see high volumes of Chinese and American ships passing through. Could China compel these ports to be converted for military use?
In 2023, then-Southern Command chief Gen. Laura Richardson said:
“There’s five state-owned – Chinese state-owned enterprises along the Panama Canal. And so what I worry about is the – is the being able to use it for dual use. Not just civilian use, but flip it around and use it for military application.”
During a 2024 Congressional hearing, Congressman Raja Krishnamoorthi (D-IL) raised concerns about the Chinese government potential to exert control over Panamanian ports: the CCP could use its control of the canal’s entry points and “could decide to delay American civilian and military shipping” particularly in an event of conflict.
The charges of transit through the Panama Canal have also increased, disproportionately hurting American ships as we use the Panama Canal more than any other country in the world.
Article III Section (c) of the permanent neutrality agreement says that tolls and other charges must be “just, reasonable, equitable and consistent with the principles of international law.”
Given these national security concerns and threats to the terms as agreed upon in the Jimmy Carter giveaway deal, it makes sense why recently confirmed Secretary of State Marco Rubio will visit Panama soon.
As China makes inroads in the Western Hemisphere and around the world, we need to maintain a strong defensive position and I know President Trump will project a strong image in foreign policy.
If you have questions, concerns, or comments, feel free to contact my office. You can call my Abingdon office at 276-525-1405 or my Christiansburg office at 540-381-5671. To reach my office via email, please visit my website at morgangriffith.house.gov.
