- 31
- Jan.
- 2025
The re-election of Donald Trump marks the dawn of a new expansionist era, fueled by bold promises made during his campaign.
From the proposal to annex Greenland to the dream of integrating Canada as the 51st US state, and the ambition to regain control of the Panama Canal—an engineering marvel and a crucial artery of global trade—Trump resurrects projects that echo the past.
Through his Truth Social platform, Trump expressed his intention to reclaim this strategic waterway, citing concerns over its management and its importance to US national security. “The Panama Canal is a vital national asset for the United States, due to its critical role in the American economy and national security,” he stated. But where does this ambition come from, and what are its real geostrategic implications?
When the Panama Canal was inaugurated in 1914, it was an unparalleled engineering feat. A complex system of locks allowed ships to navigate between the Atlantic and Pacific Oceans, bypassing mountains. However, its construction was marred by tragedy: thousands of workers lost their lives, and its history is further complicated by the controversial transfer of control from the United States to Panama in the 1970s.
The inception of this canal dates back to an American strategic vision championed by President Theodore Roosevelt at the beginning of the 20th century, during a period of imperial expansion following the Spanish-American War. This ambition is also part of the Monroe Doctrine, proclaimed in 1823, which asserted the United States' desire to repel any European intervention on the American continent. With the canal, this doctrine took on a proactive dimension, strengthening not only American regional sovereignty but also its capacity to assert itself as a global actor. This project also reflected the United States’ ambitions to position itself as a major world power. The canal was meant to combine their emerging power in the Pacific with their traditional Atlantic relations, thus enhancing their commercial and military influence.
Economically, the canal also revolutionized global trade, providing a transit route between the Atlantic and Pacific Oceans. As early as the 1890s, Wall Street financially supported this monumental project. Yet, beyond the technological advancement and economic benefits, the canal symbolized the United States’ vision as a benevolent power, differentiating itself from European imperialism, which was perceived as brutal and colonial. This image of an “altruistic power” often masked acts of imposition and domination, notably in Panama, where the United States exerted considerable influence over the country’s sovereignty for nearly a century.
It wasn’t until 1977, under President Jimmy Carter, that the United States signed the Torrijos-Carter Treaties, marking the gradual transfer of control of the canal to Panama. This process, completed in 1999, ushered in a new era for the country, restoring Panama’s control over this iconic structure. However, even today, the Panama Canal remains deeply rooted in American national identity, bearing witness to both its quest for power and the tensions inherent to its imperial history.
But why is this canal so important to Trump? The Panama Canal occupies a central place in global supply chains, allowing 6% of international maritime trade to pass through its locks. Each year, about 40% of US container traffic uses this route, making the country the canal’s primary user. In 2021, more than 73% of the ships passing through were headed to or coming from US ports.
The Panama Canal remains, under normal circumstances, the fastest route for trade between the US East Coast and Asia, linking, for example, New York to Shanghai. It is also a crucial route for trade between Europe and the US West Coast, or between South and Central America and Asia. Given this critical dependence, Donald Trump’s statements take on an alarming tone. By criticizing the transfer of sovereignty to Panama, he now threatens to claim total control of the canal if certain “moral and legal principles” are not respected, condemning, as such, high tariffs.
The canal plays a crucial role in energy trade between the United States and Asia. US exports of crude oil, refined products, and liquefied natural gas depend heavily on this route. In particular, LNG, the vast majority of whose operational capacities are located on the East Coast and in the Gulf, is closely linked to the use of the canal. Moreover, liquefied petroleum gas, an essential resource for the petrochemical industry, heating, and fuel, also transits largely through the canal, with 40% of global maritime LPG exports coming from the US, mainly destined for Asia.
However, increasing constraints on the canal’s capacity to manage energy traffic have gradually reduced its attractiveness in favor of other routes. Between 2021 and 2023, the average volumes of crude oil, refined products, and LNG passing through the canal from Asia decreased by 6%, while monthly LNG flows to China, Japan, South Korea, and Taiwan plummeted by 82%. Meanwhile, volumes passing through the Cape of Good Hope in South Africa surged by 472%. This shift toward alternative routes incurs higher costs for US shipments while increasing their carbon footprint.
This evolution has profound consequences for the United States' ambitions to use its energy trade as leverage for strategic partnerships with Asia. In the absence of a clear plan to resolve the canal's capacity issues or offer reliable alternatives for westward shipments, the Trump administration faces limits in its ability to integrate energy trade into its Asian diplomacy. Thus, the limitations of the Panama Canal, once seen as logistical constraints, have become a major strategic concern for the White House.
However, the concerns raised are not limited to economic aspects. They reflect broader fears regarding China’s growing influence in the region. Since Panama diplomatically recognized China at the expense of Taiwan in 2017, Beijing has ramped up investments, particularly in strategic infrastructure near the canal. These initiatives raise alarms in the United States, especially because of the control exerted by Hutchison Ports PPC, a Hong Kong-based company with links to Beijing, over the ports of Balboa and Cristobal, located at either end of the canal. This influence grants China a notable ability to affect logistical operations essential to the canal’s efficiency.
It also raises questions about the neutrality of the canal, guaranteed by the Neutrality Treaty signed in 1977, which ensures equal access for all nations. The United States fears that China, through its position, could steer or manipulate canal operations to the detriment of American trade. Furthermore, security concerns are emerging about the potential installation of Chinese surveillance technologies within the canal's infrastructure, which could enable espionage of US naval and commercial movements. Such an intrusion would represent a major strategic risk, providing China with crucial information about US logistics and military operations.
If Trump plans to claim the canal, he will nevertheless face significant legal and diplomatic obstacles. The Neutrality Treaty, without a time limit, obligates the United States to respect Panama’s sovereignty and the neutrality of the canal. Any attempt to regain control by force would constitute a blatant violation of international law, severely damaging US relations with Latin America. Since the handover, Panama has successfully managed the canal, notably doubling its capacity through a major expansion completed in 2016, allowing for larger vessels. Yet, Trump’s statements highlight the constant strategic importance of this maritime route for American interests.
A possible resolution to this diplomatic dispute could lie in the creation of a common path, potentially involving in-depth discussions on transit rights, auction tariffs, and exploring new opportunities for American investment in operations directly or indirectly linked to the canal. In this regard, the United States could mobilize instruments from its bureaucratic apparatus, including funding from the US International Development Finance Corporation (DFC), to support and encourage US companies to increase their investments in the canal. Such a strategy would not only restore a stronger American presence but also consolidate the United States’ economic and strategic interests in the future of this vital infrastructure, while respecting Panama's sovereignty over the canal.
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