Panama is violating its Canal Treaty — and risking US safety

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“Welcome to the United States Canal!” the once and future President Donald Trump posted on Truth Social Sunday, along with a photo of an American flag proudly fluttering over a narrow body of water.

Earlier in the day, Trump had told a crowd at Turning Point USA’s AmericaFest rally that he would never allow the Panama Canal, a strategic waterway built by the United States over a century ago to connect the Atlantic and Pacific Oceans, to fall into the “wrong hands.”

Trump made an economic argument along with his geopolitical one: “We’re being ripped off at the Panama Canal like we’re being ripped off everywhere else,” he told the audience as he denounced the increased fees billed to American shippers by the canal’s operators.

The waterway, originally an American possession, was given to Panama by President Jimmy Carter in two 1977 treaties that barely passed the two-thirds Senate majorities necessary for ratification.

The first treaty obliged Panama to operate the canal neutrally, with nondiscriminatory pricing, and allowed the United States to defend it from any threat that might interfere with its neutrality.

The second treaty transferred full control to Panama effective on Dec. 31, 1999, without superseding the first treaty’s broad provision allowing for US defense of this crucial military and economic asset.

Yet despite the assurances in these agreements, the sad truth is the Panama Canal is already in the “wrong hands”: China’s.

In 1996, Panama made a 25-year agreement to outsource management of the canal’s two entry ports — Cristóbal on the Atlantic side and Balboa on the Pacific — to a subsidiary of Hutchison Whampoa, a Hong Kong-based shipping firm.

Technically, the deal seemed to violate the 1977 Panama-US treaties, which guaranteed Panamanian operational control and local security for the canal as well as ownership.

At that time, however, Hong Kong was still a British colony — and both Congress and the US Federal Maritime Commission determined that Hutchison’s operations were not a threat to American interests.

Times have 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.

The Chinese Communist Party can exercise direct and possibly unlimited influence over any of Hong Kong’s companies, anywhere in the world.

Hutchison’s operational concession, which was renewed by Panama’s government in 2021, thus preserves de facto Chinese control over one of the world’s most vital conduits of maritime traffic.

By 2022, additional Chinese investment in Panama flooded more than $2.5 billion of Beijing’s capital into the Canal Zone, where more than 40 other Chinese companies now operate.

In 2017, Panama encouraged China’s presence by cutting ties to Taiwan and switching its diplomatic recognition to the People’s Republic.

The threat to US interests is obvious.

Two-thirds of the Panama Canal’s commercial traffic either originates from or is bound for American ports.

The conduit is also vital for the movement of US naval forces between the Atlantic and the Pacific, an essential asset in the face of rising international tensions in the Asia-Pacific region — tensions that China could well inflame in the coming years.

With Chinese interests controlling the entry ports on both sides of the canal, a circumstance that the 1977 treaties arguably prohibit, disabling the waterway would be child’s play for our adversaries in Beijing — and disastrous for America’s economy and safety.

Trump should quickly and decisively restore US control of the canal and, if necessary, its possession — citing both national-security concerns and Panama’s apparent violation of its treaty obligations.

A forceful demand for the canal’s return could be enough to compel Panama to oust China’s treaty-violating presence. If not, military occupation would end it, restoring American control as a consequence of Panama’s failure to uphold the treaty.

Panamanian President José Raúl Mulino responded to Trump’s statement by announcing — with, no surprise, China’s full support — that “every square meter of the Panama Canal and its adjacent zone belongs to Panama, and will continue to do so.”

Bold words for a leader of a country with no army and a long history of corruption, including a predecessor, Manuel Noriega, who was ousted by American forces and imprisoned in the US after running Panama as a narcostate.

“We’ll see about that,” was Trump’s reply.

After Jan. 20, Mulino and his Chinese friends just might.

Paul du Quenoy is president of the Palm Beach Freedom Institute.

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Panama is violating its Canal Treaty — and risking US safety

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