30 December 2024

The Panama Canal: Hostage to the US-China Trade War?

Allison Fedirka

In November 1906, Theodore Roosevelt became the first sitting U.S. president to make a diplomatic visit outside the continental United States, sailing to Panama to view the construction of the Panama Canal. In September 1977, President Jimmy Carter signed a treaty that would ultimately give Panama full control and operation over the canal in 2000. And in December 2025, U.S. President-elect Donald Trump threatened to retake the canal from Panama. The chances of this happening are slim, of course. But like most political rhetoric, his comments denote larger goals and aspirations – in this case, Trump’s domestic agenda, which likely includes a trade war with China. The U.S.-Panama relationship is merely a hostage to that agenda.

Control over the Panama Canal gave Washington a valuable source of revenue and immense geopolitical influence. Since the 1500s, explorers and entrepreneurs had dreamed of a path that would drastically cut the time and resources required to cross from one ocean to the other: Sea transit between the U.S. east and west coasts was a weekslong, 13,000-mile journey. Alfred Thayer Mahan, the naval and geopolitical writer, knew that U.S. control of the Central American isthmus, and the possibility of a trans-isthmus canal, would be pivotal for the projection of U.S. military and commercial power. Presidents Ulysses S. Grant and Theodore Roosevelt, both former military officers, were keenly aware of the isthmus’s strategic value. Grant commissioned a series of expedition surveys to identify possible locations and assess construction feasibility. Roosevelt later oversaw the creation of the U.S. Great White Fleet and canal construction.

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