Is Trump’s Fear of Chinese Control Over the Panama Canal Grounded in Reality?
- 2 days ago
- 3 min read
Donald Trump has revived his claim that China is taking over the Panama Canal. But with Panama retaining sovereignty over the waterway, how much of Trump's warning is backed by facts, and where does Beijing's influence actually lie?
By Pranjal Gupta
New Delhi, July 2: President Donald J. Trump on Wednesday claimed that China is taking over the Panama Canal and said America should not have handed over its control in the first place. Built under the leadership of former President Theodore Roosevelt, the Panama Canal was one of the greatest achievements of America, said Trump, adding that he cannot let China be in charge. Trump also drew a parallel to his diplomatic tactics in Venezuela and Iran to take back the waterway from China.
Trump said Democrats gave the Panama Canal away for one dollar, after which China charged and raised fees on the passing ships over the years. “But think of it: the Panama Canal, so we gave it away. The first thing they did, you know what they did? They raised the prices for the ships by four times, and they didn’t lose one ship. And then they raised it again twice, and they didn’t lose one ship. All they did is make tremendous amounts of money for years and years. How stupid was that?”
Trump stated. “And now China is trying to take over the Panama Canal, and we can't let that happen, okay?” he added, gaining a loud cheer from the audience.
The claim of selling the Panama Canal to China for one dollar is considered to be a myth, as Panama is an independent country that took formal control of the canal from the United States in 1999 under the Torrijos-Carter Treaties.
Concern Over China Expansion
After that, a Hong Kong-based company called Hutchison Whampoa (now CK Hutchison Holdings) won public bidding contracts to manage and operate the shipping ports at both
the Atlantic and Pacific entrances of the canal.
Where Trump’s concerns about Chinese expansion come from is that, over the years, other Chinese state-owned enterprises have won bids to build bridges and expand port facilities in the region, though the canal itself remains under the strict administrative control of the Panamanian government.
While China does not run the Panama Canal directly, its massive indirect commercial leverage can cause immediate supply chain bottlenecks. As tracked by the Council on Foreign Relations, this vulnerability was clearly demonstrated in March 2026, when a Panamanian court ruling against the Hong Kong-based port operator CK Hutchison triggered aggressive commercial retaliation from Beijing; China’s state-owned shipping giant COSCO halted operations at a key terminal, while Chinese port authorities subjected Panama-flagged vessels to grueling, retaliatory inspections. For everyday consumers, this type of geopolitical friction quickly translates into canceled cargo bookings, rerouted shipping lanes, delayed goods, and surging transport fees passed down by carriers.
For the people of Panama, this indirect role is a stressful tightrope walk. Panama relies heavily on the canal's revenue to power its economy, and China is one of the canal's top users. However, Panamanian officials are caught directly in the crossfire of the U.S.-China trade war.
The Panama Canal cuts through Central America to connect two massive bodies of water: the Atlantic Ocean and the Pacific Ocean.
“A little bit like Venezuela, we did a good job in Venezuela, but now equally as well with the Islamic Republic of Iran, maybe you’ve heard of it,” said Trump regarding his claims of taking back the waterway.
Trump Spoke to Digital Roosevelt
On Wednesday, Trump visited the newly built Theodore Roosevelt Presidential Library, a massive facility exploring the life of America’s 26th president, in North Dakota. The US President spoke admirably of Roosevelt, even comparing himself to the latter based on his struggles and experiences to gain the highest rank in the United States.
At the 96,000-square-foot library, Trump spoke with an artificial intelligence version of Roosevelt. Trump asked the 26th president if he considered the Panama Canal his greatest achievement. A digital Roosevelt nodded, saying he took pride in it while also listing achievements involving parks, medicine, and his Square Deal.
The Panama Canal has been one of Trump’s most frequently spoken about campaign topics, which also helped him win the presidential election for the second time.
