After Pressure from Trump, Panama Yields in Canal Agreement

U.S. warships may soon be allowed to use the Panama Canal free of charge and with priority access following a meeting between the two countries this week. However, the decision raises questions about how much Panamanian sovereignty is at stake in light of American pressure to counter Chinese influence in Latin America.

The announcement came on Wednesday (April 9), after a meeting between U.S. Secretary of Defense Pete Hegseth and Panamanian President José Raul Mulino, amid rising tensions following Donald Trump’s return to the White House in January.

The 82-kilometer waterway is strategically important for the U.S. and many other countries. It allows ships to travel between the Pacific and Atlantic Oceans without unloading or sailing around South America.

The Republican has long labeled the canal tolls a “bad deal.” According to the canal’s neutrality treaty, all nations pay the same rate.

As part of his opposition to China’s growing influence in the region, President Trump has repeatedly mentioned the need to “take back” the canal, which the U.S. handed over to Panama in 1999. He has not ruled out a military invasion to achieve that goal.

“Sovereignty” Lost in Translation

Mulino had already been working to appease the Trump administration. After a February visit from U.S. Secretary of State Marco Rubio, Panama confirmed its withdrawal from China’s Belt and Road Initiative. The government also pressured Chinese conglomerates operating Panamanian ports to leave the country.

Additionally, Panama and the U.S. agreed that American troops may be stationed in access areas and regions adjacent to the Panama Canal, according to an agreement reported by AFP.

The Panamanian government insists these will not be military bases—a sensitive topic in the Central American nation. Instead, U.S. military personnel can use authorized facilities and areas for training, exercises, and other activities.

Initially valid for three years, the agreement stipulates that the facilities will remain Panamanian state property and be used jointly by both nations’ forces.

Panama prohibits the establishment of military bases by law and dismantled its army following the 1989 U.S. invasion to capture former dictator Manuel Antonio Noriega, who was accused of drug trafficking.

But one point remains contentious. Panama’s Spanish-language version of this week’s joint statement stated that “Hegseth recognized Panama’s leadership and inalienable sovereignty over the Panama Canal and its adjacent areas.” This sentence was omitted from the Pentagon’s English version.

“I believe the omission in the English version was intentional, to make Panama feel insecure and suggest the issue is unresolved,” said Natasha Lindstaed, a political scientist at the University of Essex in the UK.

Chinese Influence

Contrary to Trump’s claims, the canal was not “given away” to Panama and is not controlled by China.

The U.S. built the Panama Canal between 1904 and 1914. Negotiations to return control to the Central American country began under Democratic President John F. Kennedy in the early 1960s and concluded in 1977.

Panama officially took control of the canal on New Year’s Eve in 1999, under the condition that it be operated neutrally.

However, China does exert influence over the canal. It is the waterway’s second-largest user after the U.S., and Chinese companies operate ports at both ends of the canal.

Military Intervention on the Table

While Trump continues his global efforts to undermine Chinese influence—such as through his trade war—a military intervention would mark a dramatic shift in U.S. foreign policy.

Protests have been ongoing in Panama since Trump first mentioned reclaiming the canal. This week, around 200 people demonstrated against Hegseth’s visit to Panama City, with one protester burning a U.S. flag.

“This has dominated headlines in Panama, creating widespread confusion and fear,” said Lindsay. “The U.S. is not very popular in Panama at the moment.”

However, Jorge Heine, former Chilean ambassador to China and international relations expert at Boston University, believes a U.S. military intervention is unlikely.

“President Trump’s rhetoric can sometimes sound extremely aggressive,” he told DW. “But at the same time, he has shown little genuine interest in promoting war or using U.S. military force as aggressively as some of his predecessors.”

Source: DW

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