The Panama Canal: A Strategic Piece in the US Geopolitical Game-MARITIME SECURITY FORUM REVIEW
History of the Panama Canal
The Panama Canal represents one of mankind’s greatest engineering achievements, linking the Atlantic and Pacific Oceans and revolutionizing global maritime trade. Its history is marked by early failures, political ambitions and innovative technologies.
1. Early Visions and Failed Attempts
The idea of a navigable waterway through the Isthmus of Panama dates back to the Spanish colonial period, when explorers realized the potential of a direct link between the oceans[1] In the 19th century, as international trade developed, interest in a canal grew exponentially.
The first concrete attempt was initiated by the French, under the leadership of Ferdinand de Lesseps, the famous engineer who had previously built the Suez Canal. Work began in 1881, but the project was plagued by technical problems and devastating outbreaks of malaria and yellow fever[2]. Lacking advanced medical knowledge and appropriate technology, more than 22,000 workers perished and the project was abandoned in 1889, leaving behind a colossal effort doomed to failure[3].
2. US Intervention and Canal Construction
The United States, realizing the strategic importance of the canal, took over the project in 1904, after supporting Panama’s independence from Colombia[4]. Under the direction of engineer John Frank Stevens, and later George Washington Goethals, construction was reorganized, introducing essential disease control measures and advanced technologies for excavation and drainage.
The canal was completed on August 15, 1914, after a decade of intensive work, making it one of the most ambitious engineering achievements of the era[5]. The gigantic locks, which allowed ships to be raised and lowered, were key to the success of the project, eliminating the need for a completely sea-level route[6].
3. The Age of American Control and the Transfer to Panama
After the opening of the canal, the US exercised control over this vital artery for world trade. The Panama Canal region was administered by the Americans for almost a century, which caused discontent among Panamanians[7].
Following tensions and diplomatic negotiations, in 1977, US President Jimmy Carter and Panamanian leader Omar Torrijos signed the Torrijos-Carter Treaty, which provided for the gradual transfer of the canal to Panama. On December 31, 1999, control of the canal was officially handed over to Panama, marking a significant milestone in the country’s national sovereignty[8].
4. The Canal in the 21st Century
In the face of increasing global trade volume, the canal was modernized through an expansion project, completed in 2016, which allowed the transit of larger vessels (Panamax and Neopanamax)[9]. This modernization reinforced the canal’s position as one of the most important strategic points of international trade.
Today, the Panama Canal remains an engineering marvel and a symbol of human progress, serving as a key commercial artery and generating significant revenues for the Panamanian economy[10].
The Panama Canal is wholly owned and managed by the State of Panama through the Panama Canal Authority, an autonomous agency responsible for the operation and maintenance of this strategic waterway.
In recent decades, China’s influence around the Panama Canal has grown significantly. Hong Kong-based CK Hutchison Holdings operates harbors at both ends of the canal, which has raised concerns among US officials about possible security and international trade implications.
Recently, US Secretary of State Marco Rubio warned Panama that Chinese influence over the canal is “unacceptable” and suggested that in the absence of immediate changes, the United States could take steps to protect its interests in the region.
In response, Panamanian President José Raúl Mulino reaffirmed the country’s sovereignty over the canal and emphasized that there was no real threat to the treaties governing its operation. However, he indicated willingness to review certain agreements with China and announced increased cooperation with the US on migration.
Thus, although China does not directly control the Panama Canal, its economic and operational presence around it has become a topic of geopolitical debate, particularly in the context of US-Panama-China relations.
The Panama Canal is wholly owned and managed by the State of Panama through the Panama Canal Authority, an autonomous agency responsible for the operation and maintenance of this strategic waterway.
Recently, President Donald Trump has expressed displeasure over Chinese influence around the Panama Canal. Hong Kong-based CK Hutchison Holdings operates harbors at both ends of the canal, which has raised concerns among US officials about possible security and international trade implications.
Panama Canal: A Strategic Piece in the US Geopolitical Game
The Panama Canal is not only a monumental engineering achievement, but also a vital hub for global trade, particularly for the United States. Although its control has been transferred to the Panamanian authorities since 1999, it remains a pivotal point in the American geopolitical architecture. Its importance lies in its economic role, its implications for national security, and in the strategic competition with China, an emerging power that has built a significant presence around this waterway.
1. The Panama Canal and the American Economy
An indispensable trade artery
The Panama Canal acts as an invisible bridge between the two oceans, facilitating the flow of goods between the East and West Coasts of the United States. Without this strategic link, ocean carriers would be forced to sail around South America, bypassing Cape Horn – a route that would increase transit times by some 8,000 kilometers and incur significant additional costs[11].
The US remains the largest user of the canal, with more than 66% of its traffic directly linked to the US economy[12]. Agricultural products, automobiles, liquefied natural gas and consumer goods cross the route daily, optimizing the distribution of resources between international and domestic markets.
Canal expansion and modernization of US ports
In 2016, the Panama Canal Authority finalized an ambitious expansion project, which allowed the transit of large ships (Neopanamax), thus restructuring global trade[13]. As a result, the American ports of Los Angeles, Houston, New York and Savannah had to adapt, investing billions of dollars in infrastructure to accommodate these giant ships[14].
This modernization strengthened the position of the US in global trade, allowing a more efficient flow of goods and strengthening the competitiveness of the American economy in the international market.
2. An Area of Strategic Interest: Security and Foreign Policy
The military importance of the canal
The Panama Canal was not only an economic investment, but also a central element in US security strategy. During World War I and World War II, the US Navy used the canal to move fleets rapidly between the Atlantic and Pacific theaters of operations[15].
Today, although the US no longer directly controls this route, the ability to quickly move equipment and troops between the oceans remains a crucial factor in defending its global interests. The presence of US military vessels in the region emphasizes the strategic role of the channel in maritime security.
China’s influence and the US reaction
In recent decades, China has strengthened its position around the Panama Canal, both through economic investment and commercial partnerships. Hong Kong-basedCK Hutchison Holdings controls port terminals at both ends of the canal, a situation that has raised concerns in Washington[16].
US officials believe Beijing is using the investment to expand its geopolitical influence, turning the Panama Canal into a potential strategic pressure point. This perception has prompted the Trump administration to take a firm stance, even suggesting that the US could take steps to counter Chinese influence in the region[17].
3. Diplomatic Perspectives and Tensions
US-Panama relations
Despite US pressure, the Panamanian government reaffirmed its sovereignty over the canal and rejected the idea of foreign intervention. Panamanian President José Raúl Mulino recently stated that although Panama is open to working with the US, it will not give in to pressure to limit its trade relations with China[18].
However, talks between US and Panamanian officials suggest that Washington could step up its economic support for Panama by offering alternatives to Chinese investment in order to reduce its dependence on Beijing.
An uncertain future?
The Panama Canal remains a centerpiece of US global strategy. As tensions rise between Washington and Beijing, the waterway is likely to become a new front in the geopolitical competition between the two superpowers.
If Chinese influence continues to expand, the US may be forced to adopt more aggressive measures to protect its interests, either through direct investment or diplomatic pressure on the Panamanian government. Thus, the future of the canal is not just a matter of maritime logistics, but also a complex political equation with major implications for the global balance of power.
Conclusion
The Panama Canal is not only a trade route but also a symbol of international competition for influence. For the US, it is a vital asset, both economically and strategically. In the face of Chinese expansion, Washington must decide whether to step up efforts to maintain its influence in the region or risk ceding ground to Beijing. What is certain is that, whatever course world geopolitics takes, the Panama Canal will remain a major point of interest in global power dynamics.
MARITIME SECURITY FORUM
[1] McCullough, David. The Path Between the Seas: The Creation of the Panama Canal, 1870-1914. Simon & Schuster, 1977.
[Galloway, Thomas R. The Diseases of the Isthmus of Panama. The Journal of Tropical Medicine, 1904.
[3] Parker, Matthew. Panama Fever: The Epic Story of the Building of the Panama Canal. Anchor Books, 2008.
[4] LaFeber, Walter. The Panama Canal: The Crisis in Historical Perspective. Oxford University Press, 1978
[5] National Geographic. The Making of the Panama Canal. Documentary, 2014
[6] Goethals, George W. The Panama Canal Construction Report. U.S. Government Printing Office, 1915
[8] Treaty Documents. Torrijos-Carter Treaties, U.S. Congress Archives. 1977
[9] Panama Canal Authority. Expansion Project Report. 2016
[10] The Economist. Panama Canal’s Economic Impact. 2021
[11] McCullough, David. The Path Between the Seas: The Creation of the Panama Canal, 1870-1914. Simon & Schuster, 1977
[12] Panama Canal Authority, Annual Trade Report, 2023.
[13]The Economist. The Expansion of the Panama Canal and Its Global Impact. 2016.
[14] U.S. Department of Transportation, Infrastructure Modernization Report, 2022
[15] Maurer, Noel & Yu, Carlos. The Big Ditch: How America Took, Built, Ran, and Ultimately Gave Away the Panama Canal. Princeton University Press, 2010
[16] Wall Street Journal, China’s Growing Influence in the Panama Canal, 2024
[17] BBC News, Panama’s Response to US Pressure on the Canal, 2025.
[18] Reuters, Trump’s Position on the Panama Canal and China’s Role, 2024