Panama Canal Under Pressure: Trump's Threats and Latin American Sovereignty

"China is operating the Panama Canal... we're taking it back, or something very powerful is going to happen."

With those words, President Trump revived a century-old specter: American control over the strategic waterway that connects the Atlantic and Pacific. The threat electrified Latin America—and strengthened the case for regional solidarity.

The Canal's Importance

The Panama Canal handles approximately 5% of global maritime trade. Ships carrying goods between Asia and the U.S. East Coast, between Europe and South America, between countless other origin-destination pairs pass through its locks daily. Control of the Canal means leverage over the global economy.

The Canal generates nearly $5 billion in annual revenue for Panama—making it the country's most valuable asset by far. Any threat to Panamanian sovereignty over the waterway is an existential threat to the nation itself.

The China Claim

Trump's assertion that "China is operating the Panama Canal" is misleading. The Canal is operated by the Panama Canal Authority, a Panamanian government agency. Chinese companies do operate port facilities at either end of the Canal—as do companies from many nations—but they have no control over the waterway itself.

The rhetoric, however, serves a purpose. By framing the Canal as somehow "Chinese," Trump justifies American pressure on Panama and positions any defense of Panamanian sovereignty as defense of Chinese interests.

Regional Response

CELAC's response was swift and unified. The regional body condemned U.S. threats as violations of Panamanian sovereignty and international law. Argentina's Milei was the sole member state to abstain—further isolating him from his neighbors.

The solidarity was notable. Nations that disagree on almost everything—leftist governments like Colombia and Mexico, centrist administrations, even some right-leaning states—united in defense of the principle that no country should dictate to another.

Panama's Response

Caught between U.S. pressure and regional solidarity, Panama has pursued a delicate balancing act. The government signed security agreements allowing U.S. troops on Panamanian soil for three years—a concession that alarmed some Latin American partners. But it has also reaffirmed the Canal's status as Panamanian sovereign territory.

The situation illustrates the vulnerability of small nations facing great power pressure. Panama alone cannot resist American demands. But Panama as part of a regional bloc—a confederation, perhaps—would have far more leverage.

The Gran Colombia Connection

Panama was part of the original Gran Colombia from 1821 until independence in 1903—itself engineered by the United States to facilitate Canal construction. The historical irony is palpable: Panama left Gran Colombia and fell under American influence; now American pressure might push it back toward regional integration.

Petro's confederation proposal offers Panama an alternative to dependence on Washington. Within a Gran Colombian bloc, Panama would contribute its strategic asset—the Canal—while gaining the diplomatic and economic support of 100+ million people.

Trump's threats, intended to intimidate, may instead accelerate exactly the kind of regional unity he seeks to prevent.