Donald Trump has begun his second term as president by ramping up pressure on Panama – threatening to “take back” the Panama Canal and accusing the country of ceding control of the critical waterway to a US rival: China. “Above all, China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump claimed in his inaugural speech last month.
There’s no evidence that China controls the canal, which is run by an independent authority appointed by Panama’s government. Beijing has repeatedly denied that it has interfered in canal operations. But the US concern comes as the Trump White House seeks to shore up national security, especially in its own neighborhood, and win an economic competition with China. At the heart of Trump’s contentions are a Hong Kong-based company that operates two key ports at either end of the 50-mile long waterway – and broader concerns about Beijing’s expanding influence in a region of the world where the US has long been the dominant power.
Panama’s President José Raúl Mulino has said Panama’s sovereignty over the canal was not up for debate, but the country has made other concessions to US pressure. Following a meeting with top US diplomat Marco Rubio last Sunday, Mulino said Panama would exit China’s Belt and Road infrastructure drive – a blow for Beijing, which had celebrated Panama as the first country in Latin America to join the program.
Panamanian officials last month also launched an audit of the Hong Kong-owned firm that operates two ports at either end the canal.
Does China have a presence in the Panama Canal?
The Trump administration’s key concern is found at either end of the waterway, where two of the five ports that service the canal are operated by Panama Ports Company (PPC), part of a port operator owned by Hong Kong-based conglomerate CK Hutchison Holdings. Based in a gleaming skyscraper in downtown Hong Kong, CK Hutchison is a publicly listed company and one of the world’s largest port operators, overseeing 53 ports in 24 countries, according to the company. It was first granted the concession over the two Panama Canal ports in 1997 when Panama and the US jointly administered the canal. That concession was renewed in 2021 for another 25 years.
Rubio ahead of his visit to Panama said Hong Kong-based companies “having control over the entry and exit points” of the canal is “completely unacceptable.” Hong Kong, which came under Chinese control in 1997, is meant to have a high level of autonomy from mainland China, but Beijing has dramatically tightened its grip on the city in recent years following widespread pro-democracy protests. “If there’s a conflict and China tells them, do everything you can to obstruct the canal so that the US can’t engage in trade and commerce, so that the US military and naval fleet cannot get to the Indo-Pacific fast enough, they would have to do it,” Rubio said in an interview with journalist Megyn Kelly, without directly naming the company.
There’s no evidence that the Chinese government controls the canal or of Chinese military activity in Panama, experts say.But US officials’ concerns come amid a global scrutiny of Beijing’s efforts to build or secure access to commercial ports around the world – which could also benefit China’s expanding navy. When it comes to the Panama Canal, some observers say that Chinese firms’ involvement in the canal and its infrastructure could give Beijing leverage – both in terms of commercial advantage and in the event of a potential future conflict with the US.
Rubio referenced this concern during a confirmation hearing for his post in January, saying that a “foreign power” possesses the ability, through their companies, “to turn the canal into a choke point in a moment of conflict.” The strategic risk from a military perspective is that the more commercial assets that are linked to China around the canal, the more options Beijing has to block the US from moving military equipment through the waterway in the event of a conflict between them, according to R. Evan Ellis, a research professor of Latin American Studies at the U.S. Army War College Strategic Studies Institute.
Source: Here