Global Politics Explainer

CWA # 1620
Global Politics Explainer
Trump wants to retake the Panama Canal. Why?

Vaneeta
15 March 2025
Photo Source: AP Photo

4 March 2025, Donald Trump in his speech to the joint session of congress vowed to reclaim the Panama Canal to enhance the national security.  He has repeatedly said about taking the canal back in his address since December 2024.

Why and how was the Panama Canal built?
The Panama Canal was built in the twentieth century to find a shortcut for ships to make trade cheaper. In 1881, France made the first attempt to build the manmade waterway between the two oceans under Ferdinand de Lesseps, who was responsible for the success of the Suez Canal. The project, which was started by France in 1880, was abandoned in 1889 with the loss of 20,000 lives mainly to malaria, yellow fever and other diseases. 

The US had vast interest at the time of building the canal. Earlier ships had to go around the South American continent, but the canal shortened the distance to around 800 miles, which was five months shorter. Cutting down the travel time served two ways: one, it enhanced trade, making the cost cheaper, and two, it increased the efficiency of delivering goods.  For the US, it was a geopolitical strategy to have control over both the ocean. Two oceans surround the US, and at the end of the nineteenth century, many scholars were talking about the power of the sea and its influence on global order. 

The US also wanted to have military supremacy. Having a canal to connect to oceans expands the maritime power of the country tremendously. The US, which experienced the Spanish-American war in 1898, realised the need for shorter routes for its navy. Having a territory in Central America with administration control would help its military in times of war, which was one of the conditions later at the time of the handover of the canal to Panama. Finally, the US wanted to become the flag bearer of modern civilisation. The building of the canal was portrayed as a selfless act for humankind, which made them exemplary actors who could lead in another sector as well.  Therefore, having a canal in Central America to connect both oceans served the interest of the US.

Panama then was part of Colombia and did not agree to the conditions of the deal with the US. In 1903, President Roosevelt dispatched US warships to Panama City and helped Panama gain independence. 
The Hay-Bunau-Varilla Treaty of 1903, gave the US a 10-mile piece of land for $10 million and an annualannuity of $250,000 to build the canal, creating the Panama Canal Zone.
Almost after 10 years, it was completed in 1914 with 5609 more lives lost.  Its operation began on 15 August 1914.    

After building the canal, what did the US transfer it to Panama in 1980?
The Canal Zone was under US control when it was handed over to Panama after the Torrijos-Carter treaty in 1977.  The US negotiated the treaty and handed over the canal to Panama for the following reasons. First, it impacted the relationship between Panama and the US and, overall, with Latin America. It was a symbol of colonialism for Latin Americans and anti-colonialist and anti-imperialist sentiments were high among people. The Canal Zone was considered American territory and Panamanians were not allowed to enter, which angered the locals. There were many student protests and multiple riots to oppose the differential treatment of Panamanians in their own country. 

Second, it was an economic decision, the US lost money in the operations and maintenance of the canal after WWII and wanted to hand it over to the UN during Trueman’s presidency. However, they hesitated to sign the treaty because it was considered a national pride. For the same reason, it was criticised when Carter signed the treaty in 1977. Lastly, the US also had pressure to hand over the Panama Canal after the Suez Canal crisis, where the US asked France and the UK to withdraw forces and pushed for a diplomatic rather than a military solution.

 Why does Trump want the Panama Canal back?
Trump calls the handover a foolish mistake of the Carter administration. For him, the high transit fees and Chinese influence in canal operations, are the primary reasons. He claims that the Chinese are influencing the operations of the canal. However, the Panama Canal Authority, an autonomous government body, operates the canal. Trump might be referring to the two ports, Balboa Port and Cristobal Port, both at the ends of the canal and operated by a Hong Kong-based company. Before the handover of the canal in 1999, the tender to manage the port was won by a company called Hutchison-Whampoa for 25 years, and in 2021, it was extended to another 25 years.

Recent claims that the US has started to reclaim the canal were referred to, the Hong Kong based company decision to sell shares of its units to an investment group led by American company BlackRock.
Trump's claim to take it back has no legal backing, as in the treaty of Torrijos-Carter, there was no mention of the US taking it back under any circumstance. There were two important provisions: one was to maintain the neutrality of the canal and open it for the vessels of all countries. Second was the US's right to defend the neutrality of the canal and give priority passage in military emergencies. 

What does the above mean?
Trump has changed the dynamics of the region. His threats to take over the Panama Canal and Greenland show the approach towards strategically important points.  His threats could be interpreted as a negotiation tool and a way of telling Panama to reduce its relationship with China. Panama was the first country to join China's Belt and Road initiative in 2017, and other Latin American countries followed. After the visit of Secretary of State Marco Rubio in February, Panama decided not to renew its BRI agreement.

Panama recently launched an audit of Panama Ports Company to ensure efficient and transparent use of public resources. Additionally, they have complained to the UN about Trump's threats. Regarding Latin America, the Panama Canal's control has been significant as an anti-colonial, anti-imperialist movement in the region. So, threats to take control back could be interpreted by the other Latin American countries as a threat to their sovereignty and could be considered a new form of suppression for the region, which could mean closer ties to Asians.

About the author
Vaneeta is a postgraduate student at the Centre for South Asian Studies, Pondicherry Unievrsity.  
 


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Why is Trump interested in the Afrikaner question in South Africa?
Global Politics Explainer
June 2025 | CWA # 1720

Lekshmi MK

New WMO Report on Arctic Warming
What are the social, economic and environmental implications of Arctic warming
Global Politics Explainer
June 2025 | CWA # 1719

J Yamini  

China’s EV Surge
What contributes to the rise of BYD
Global Politics Explainer
June 2025 | CWA # 1717

J Yamini

Gender Violence in Pakistan:
What are the larger issues in the Noor Mukadam case?
TWTW Note
June 2025 | CWA # 1715

Femy Francis

The US-China:
On Tariffs, Rare Earths and Visas
The World This Week
June 2025 | CWA # 1713

GP Team

The World This Week #315
The UN Ocean Conference in France and the US-China Meeting in London
CW Note
June 2025 | CWA # 1712

R Preetha

The World This Week
June 2025 | CWA # 1705

GP Team

The World This Week #314
Elections in South Korea and Poland I China and the Pacific Island Countries I Bangladesh Election Announcement 2026
Global Politics Explainer
June 2025 | CWA # 1703

M Kejia 

Sagarmatha Sambaad in Nepal
Kathmandu’s Global Agenda for the Himalayas
Global Politics Explainer
June 2025 | CWA # 1700

R Preetha

Ethiopia bans the TPLF
What does the TPLF ban mean for the Pretoria agreement? What next for Ethiopia?
TWTW Note
June 2025 | CWA # 1694

Aashish Ganeshan

The US:
Harvard vs Trump Administration
The World This Week
June 2025 | CWA # 1691

GP Team

The World This Week #313
China-ASEAN-GCC Summit I President Macron's visit to South East Asia I Trump Vs Harvard
The World This Week
May 2025 | CWA # 1690

GP Team

The World This Week #312
Elections in Romania, Portugal & Poland I UK-EU Summit
CW Note
May 2025 | CWA # 1689

Padmashree Anandhan

Ukraine
Continuing Russia’s Aerial Attacks, despite exchange of prisoners
CW Note
May 2025 | CWA # 1688

Ayan Datta

Gaza
The Humanitarian Crisis and Israel’s Renewed Offensive
TWTW Note
May 2025 | CWA # 1685

Aparna A Nair

UK-EU Summit:
First step towards a reset
TWTW Note
May 2025 | CWA # 1683

Aashish Ganeshan

Elections in Portugal:
The Rise of Chega Party and the Search for Political Stability
TWTW Note
May 2025 | CWA # 1679

Aashish Ganeshan

US in the Middle Easr
Trump’s visit to Saudi Arabia, Qatar and UAE
TWTW Note
May 2025 | CWA # 1678

Gauri Gupta

China in Latin America
China-CELAC forum: Strengthening ties with Latin America and Caribbean
The World This Week
May 2025 | CWA # 1677

GP Team

The World This Week #310-311
China in Latin America and the Carribbean I Trump's Middle East Visit I Denmark as the new Arctic Chair
CW Note
May 2025 | CWA # 1675

Lekshmi MK

Turkey:
PKK disbands after 40 years of armed insurgency
CW Note
May 2025 | CWA # 1673

Padmashree Anandhan

Ukraine:
The Discussion in Turkiye and the Elusive Ceasefire
CW Note
May 2025 | CWA # 1671

Abhiruchi Chowdhury

US, Ukraine and Russia:
Air attacks amidst a Minerals deal and Ceasefire Proposals
Global Politics Early Bird
May 2025 | CWA # 1670

Fleur Elizabeth Philip

Singapore Elections in 2025:
People’s Action Party (PAP) Wins, Again
TWTW Note
May 2025 | CWA # 1667

R Preetha and Brighty Ann Sarah

East Asia:
Tough Tariff Negotiations with the US
TWTW Note
May 2025 | CWA # 1666

Padmashree Anandhan

The US-Ukraine
The mineral deal with the US
Conflict Weekly
May 2025 | CWA # 1665
Conflict Weekly # 280-81
India-Pakistan De-escalation I Ukraine Discussion in Istanbul I The Battle over Port Sudan I Disbanding of PKK in Turkiye I France-Algeria Diplomatic Tensions
Global Politics Early Bird
May 2025 | CWA # 1663

R Preetha

Canada Elections 2025:
What do the results convey? What next for Mark Carney?
Conflict Weekly 250th Issue
October 2024 | CWA # 1480

IPRI Team

This Week in History
July 2024 | CWA # 1413

Ramya B

Global Politics Early Bird
May 2024 | CWA # 1336

Femy Francis

This Week in History
April 2024 | CWA # 1275

Ramya B

NIAS Global Politics Database
March 2024 | CWA # 1251

NIAS Africa Team

Africa This Week
This Week in History
March 2024 | CWA # 1246

Sivasubramanian K

NIAS Global Politics Database
February 2024 | CWA # 1226

NIAS Africa Team

Africa This Week
The World This Week
November 2023 | CWA # 1148

GP Team

The War in Ukraine
October 2023 | CWA # 1091

Annem Naga Bindhu Madhuri

Issues for Europe
NIAS Pakistan Weekly
October 2023 | CWA # 1087

PR Team

The World This Week
October 2023 | CWA # 1083

GP Team

Conflict Weekly
August 2023 | CWA # 1049

IPRI Team

IPRI Quarterly Forecasts I Triggers, Trends, and Trajectories
July 2023 | CWA # 1012

Bibhu Prasad Routray

Myanmar continues to burn
The World This Week
July 2023 | CWA # 1009

GP Team

2022: The World This Year
December 2022 | CWA # 879

Padmashree Anandhan

The Ukraine War
2022: The World This Year
December 2022 | CWA # 872

Sapna Elsa Abraham

Europe: Heatwaves, Wildfires, Droughts, and Ice Melt in Alps
November 2022 | CWA # 838

Rishma Banerjee

Tracing Europe's droughts
NIAS Africa Weekly
March 2022 | CWA # 705

NIAS Africa Team

In Focus: Libya
The World This Week: 150th Issue
December 2021 | CWA # 630

GP Team

Europe in 2021
Pakistan Reader
October 2021 | CWA # 588

Abigail Miriam Fernandez

TLP is back again
NIAS Fortnightly on Science, Technology & International Relations
August 2021 | CWA # 528

STIR Team

Space Tourism
GLOBAL PROTEST MOVEMENTS
September 2020 | CWA # 337

Anju Annie Mammen

The FATF Meeting, February 2020
February 2020 | CWA # 235

Lakshmi V Menon

Science, Technology and International Relations
September 2019 | CWA # 162

Lakshman Chakravarthy N

5G: A Primer
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 71

Mahesh Bhatta

Nepal
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 70

Nasima Khatoon

The Maldives
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 69

Harini Madhusudan

India
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 68

Sourina Bej

Bangladesh
South Asia Monthly Brief (Nov 2018)
December 2018 | CWA # 67

Seetha Lakshmi Dinesh Iyer

Afghanistan
United States
July 2018 | CWA # 47

Rahul Arockiaraj

East Asia
June 2018 | CWA # 26

Siddhatti Mehta