Donald Trump wants the Panama Canal back. Speaking at the opening of the Theodore Roosevelt Presidential Library in Medora, North Dakota, he didn't hold back. He called the historic handover of the strategic waterway a stupid mistake and warned that China is aggressively moving to take it over.
It's a bold claim. It's also an issue he has hammered on repeatedly since taking office again. For anyone tracking global shipping, Latin American geopolitics, or American foreign policy, this isn't just standard political theater. It's a window into how the administration views global trade bottlenecks and the growing influence of Beijing in the Western Hemisphere. Also making headlines lately: Why Panama Is Staking Its Future On A Maximum Security Prison.
The real question is whether Trump's claims hold water or if they're just a nostalgic look back at early 20th-century American imperialism. Let's look at what happened in North Dakota, the history of the canal, and the reality of China's footprint in Central America.
The North Dakota Speech and the Scriptless Rant
The setting was deliberate. Theodore Roosevelt practically willed the Panama Canal into existence. He backed a Panamanian revolution against Colombia, secured the Canal Zone, and built one of the greatest engineering wonders of the world. Standing at Roosevelt's new presidential library, Trump tapped directly into that legacy. Additional details regarding the matter are covered by Al Jazeera.
Trump threw away whatever notes he had. He told the crowd that the canal should have never been given away. He focused heavily on the economics of the route, pointing out that Panama immediately hiked prices for ships.
According to Trump, Panama raised transit fees four times right out of the gate without losing a single ship. Then they raised them twice more. He pointed out that they made tremendous amounts of money for years. His takeaway was simple: the United States got ripped off while Panama got rich.
Then came the warning about Beijing. Trump stated bluntly that China is trying to take over the Panama Canal. He told the audience that his administration isn't going to let that happen. It wasn't part of the original script for his speech, but Trump has never been one to stick to the teleprompter when a massive geopolitical talking point is on his mind.
The Torrijos Carter Treaties and How the US Left
To understand why Trump is so angry about this, you have to go back to 1977. President Jimmy Carter signed the Torrijos-Carter Treaties alongside Panamanian leader Omar Torrijos. The agreement set a hard deadline for the United States to pack up and leave.
On December 31, 1999, the United States officially handed full control of the canal and the surrounding Canal Zone over to the Panama Canal Authority. For decades before that, the Canal Zone was essentially a mini-American state inside Panama. It had its own US judges, police, neighborhoods, and schools. It was a massive source of tension.
Panamanians viewed the zone as a colonial insult. Riots broke out in 1964, leading to the deaths of both Panamanian citizens and US Marines. Carter signed the treaty because keeping the canal by force was becoming a diplomatic nightmare that alienated the entire continent.
Trump has hated this deal for a long time. He first started talking about how badly the US got ripped off back in 2003 when he visited Panama City for the Miss Universe pageant. He's maintained that stance ever since. In his eyes, the US built it, paid for it in blood and cash, and gave it away for nothing.
Separating Rhetoric From Reality on Chinese Influence
Is China actually taking over the canal? The short answer is no, but the long answer is complicated.
China doesn't operate or control the Panama Canal Authority. The canal is strictly run by an autonomous agency of the Panamanian government. There's also a strict treaty in place: the Permanent Neutrality Treaty. This international agreement guarantees that the canal remains neutral and open to peaceful transit for all nations, even in times of war. If anyone violates that neutrality, the United States explicitly retains the unilateral military right to step in and defend the waterway.
However, Beijing has massive economic leverage in the region.
- Port Operations: Chinese companies hold long-term concessions to operate ports at both ends of the canal. Hutchison Ports, a company based in Hong Kong, runs the ports of Balboa on the Pacific side and Cristobal on the Atlantic side.
- Infrastructure Contracts: Chinese state-owned enterprises have won major bidding wars for infrastructure projects in Panama, including bridges and energy facilities.
- Trade Volume: China is the second-largest user of the Panama Canal, right behind the United States.
So while China doesn't run the locks or set the transit rules, Chinese state-backed entities sit at the literal entry and exit gates of the canal. That's what worries Washington hawks. It's not a military occupation. It's an economic encirclement.
Birthright Citizenship and the Executive Power Play
Trump didn't stop at the canal during his North Dakota speech. He used the platform to pivot to domestic legal issues, specifically targeting birthright citizenship and praising recent wins at the Supreme Court.
He renewed his sharp criticism of how the US legal system handles birthright citizenship. Trump argued that the 14th Amendment was never intended to grant citizenship to wealthy foreign nationals flying into the country on private jets to give birth. Instead, he argued it was passed exactly one month after the Civil War ended specifically to protect the children of formerly enslaved people.
He connected this to a broader theme of reclaiming presidential authority. Trump celebrated a recent 6-3 Supreme Court ruling that he claimed gave massive structural power back to the executive branch. He referenced what he called the Slaughter case, claiming it reversed limits placed on the presidency during the FDR era in 1932. For Trump, a stronger presidency is exactly what's needed to fix both domestic immigration loopholes and international blunders like the loss of the Panama Canal.
The Environmental Crisis Missing From the Debate
While politicians argue about treaties and flags, the real threat to the Panama Canal isn't a Chinese flag or a change in ownership. It's a lack of rain.
The Panama Canal doesn't use seawater. It relies entirely on fresh water from Gatun Lake to operate its massive system of locks. Every single ship transit flushes millions of gallons of fresh water out into the ocean. Over the last few years, severe droughts driven by El Niño patterns have caused Gatun Lake's water levels to plummet.
This has forced the Panama Canal Authority to restrict the draft sizes of vessels and slash the number of daily ship transits. Shipping companies have faced massive delays and astronomical auction fees just to secure a spot in line.
Because of these supply chain bottlenecks, American energy exports have taken a massive hit. US liquefied natural gas bound for Asian markets like Japan, South Korea, and China has frequently been forced to bypass Panama entirely. Instead, ships are taking the incredibly long route around South Africa's Cape of Good Hope.
Blaming Panama for raising prices ignores the basic laws of supply and demand. Panama added freshwater surcharges because water is quite literally running out. Taking the canal back via military force or diplomatic bullying won't make it rain.
How to Navigate the Geopolitical Noise
If you're managing a business, tracking global markets, or trying to make sense of the headlines, you need to filter out the campaign rhetoric from operational reality.
Keep a close eye on alternative trade routes. The Panama Canal's unreliability means logistics firms are increasingly relying on the US intermodal rail network or the Magellan Straits. Diversify your transport options so you aren't at the mercy of a single bottleneck.
Monitor actual contract renewals at the ports of Balboa and Cristobal. The real gauge of Chinese influence isn't Trump's speeches; it's whether the Panamanian government continues to award critical infrastructure concessions to Beijing's state-owned firms.
Watch the legal battles over executive authority in Washington. Trump's focus on the Supreme Court shows he's actively hunting for structural ways to bypass traditional congressional oversight on foreign policy. If his legal teams find a workaround, expect sudden, unilateral tariff actions or trade renegotiations throughout Latin America.
