One of the most unexpected geopolitical flashpoints of late 2024 and early 2025 has been the renewed focus by former U.S. President Donald Trump on reclaiming control over the Panama Canal. Trump’s provocative statements warning of forcibly “taking back” the canal have reverberated across Panama and raised alarms about escalating tensions in U.S.-Panama relations and broader hemispheric geopolitical dynamics. Historically, the canal epitomises a fraught legacy of U.S. imperial influence stretching back to the early 20th century, a period when the United States not only exerted physical control over the Canal Zone but also governed it under an exclusionary system reminiscent of Jim Crow segregation.
Miriam Pensack, a historian specialising in Latin America, sheds light on this complex imperial history and contemporary ramifications. Since Panama reclaimed sovereignty over the canal in 1999, the canal has been a symbol of Latin American self-determination, contrasting sharply with the canal’s earlier era under U.S. control when “Zonians” — white American canal workers — lived in segregated enclaves separate from Panamanian, African-American, and other foreign workers. Pensack notes that today, vast areas of what was once the Canal Zone have been transformed into national parks and economic hubs, including the Ciudad del Saber, a centre for international NGOs and academic institutions, symbolising Panama’s efforts to repurpose and reclaim its territory both symbolically and economically.
Trump’s December 2024 threats to retake the canal, citing concerns over Chinese influence and high toll fees, took many by surprise, despite a longstanding neoconservative interest in the canal as a strategic asset. The canal’s geopolitical importance has only increased with China’s Belt and Road Initiative, which Panama first joined in Latin America. This strategic alignment appears to have triggered Trump’s belligerence, aligning with a broader U.S. bipartisan effort to counter China’s expanding global infrastructure footprint. Yet, these threats run counter to decades of diplomatic treaties, dating back to the 1977 Carter-Torrijos agreements, which irrevocably transferred control to Panama and emphasised Panama’s sovereign rights—a fact strongly reiterated by Panama’s government. The Panamanian foreign minister reaffirmed their sovereignty as “irreversible” and “non-negotiable,” underscoring national unity in the face of external pressures.
The Trump administration’s rhetoric did not remain mere words. In a significant development, U.S. investment giant BlackRock in March 2025 acquired major stakes in Panama’s crucial ports, formerly controlled by Hong Kong’s CK Hutchison. This move, seen as a direct response to U.S. concerns over Chinese influence, was reportedly influenced by Trump administration pressure and aim to secure American interests in the region without violating Panama’s formal sovereignty over the canal itself. The acquisition of a 90% stake in the ports of Balboa and Cristóbal, along with an 80% stake in global port subsidiaries, illustrates the financial muscle being deployed to counterbalance Chinese investments and alleviate political tensions. The deal was hailed by some as a “strategic recalibration” in the Panama Canal’s sphere of influence.
Despite a commonality in political party affiliation, Panama’s current president José Raúl Mulino has attempted to distance his administration from former right-wing leader Ricardo Martinelli, who was mired in corruption scandals. While Mulino pursues a right-wing, pro-business agenda, he is also focused on restoring international financial credibility and reforming the country’s social security system, suggesting a more pragmatic and stable governance approach in contrast to the tumultuous Martinelli years. Interestingly, domestic politics in Panama have been shaped both by internal challenges and the pressures arising from U.S. geopolitical posturing.
Miriam Pensack’s broader scholarship links the Panama Canal’s history to other imperial enclaves, such as Guantánamo Bay in Cuba, which share a legacy of U.S. territorial control born out of early 20th-century imperial expansionism. Both holdings were acquired through agreements granting the U.S. rights “in perpetuity,” and both have become emblematic of ongoing struggles over sovereignty and human rights. Guantánamo’s history as a detention site for Haitian and Cuban refugees in the 1990s parallels the modern challenges posed by U.S. immigration and detention policies—a pattern of extraterritorial incarceration rooted in complex legal and sovereign ambiguities.
Trump’s aggressive stance toward the canal and the region reflects the enduring imperial mindset that still shapes parts of U.S. foreign policy. Although the canal remains firmly under Panamanian control, the threat of military or economic coercion serves to unsettle the region and revisits troubling historical dynamics of U.S. dominance. The canal today is managed efficiently by Panama, which has expanded and modernised the waterway to accommodate contemporary global shipping demands. Panamanian officials stress that fee increases are necessary to maintain this vital infrastructure, rejecting Trump’s claims that tolls are unfair or exorbitant.
In sum, the attempt to reinvigorate U.S. control over the Panama Canal by force or coercion is fraught with legal, political, and moral complications. It ignites historical wounds of imperialism and threatens the diplomatic stability in Latin America at a time when the region is pursuing increased sovereignty and developmental autonomy. The recent port sale to a U.S. firm may ease immediate tensions but does not address the underlying grievances or the unilateral rhetoric that risks destabilising a crucial international waterway. Meanwhile, the story of the canal zone and its transformation remains a potent reminder of how imperial legacies continue to shape contemporary global politics and human lives alike.
Source: Noah Wire Services
