Is Trump Right About China Controlling The Panama Canal? Well, Not Exactly!

Donald Trump a few days back made a bold claim—about China supposedly “operating” the Panama Canal. If you’ve been following his speeches lately, you might have heard him suggesting that China has its hands all over the 51-mile waterway. But how much of that is actually true?

First, What’s the Big Deal About the Panama Canal?

The Panama Canal is one of the most strategic trade routes in the world, connecting the Atlantic and Pacific Oceans and cutting weeks off shipping times. Whether it’s goods flowing from Shenzhen to the US East Coast or shipments moving between San Francisco and New York, the canal is a vital economic artery.

And yes, the US is still the primary user. But China also has a significant stake, handling about 21% of the cargo passing through the canal. So, does that mean Beijing controls it? Not quite.

Who Actually Runs the Canal?

Despite Trump’s claims, the canal is directly operated by Panama—not China, not the US, not any foreign entity. However, China has certainly increased its presence around the canal in the form of infrastructure projects and investments and this is where things get interesting.

Chinese Investments, Expanding Influence or Just Smart Business?

China ramped up its involvement after Panama signed onto the Belt and Road Initiative (BRI) in 2017. The initiative, for those unfamiliar, is Beijing’s ambitious global infrastructure project aimed at strengthening trade ties (and, some argue, political influence).

Chinese firms have worked on several big projects near the canal –

• The Cristóbal and Balboa ports—operated by CK Hutchison, a Hong Kong-based firm.

• A new bridge project worth $1.42 billion—which has been plagued with delays but is now showing progress.’

• The Amador Cruise Terminal—built by a Chinese company.

• An extension of the Panama City Metro—handled by China Railway Tunnel Group.

So, while China is definitely involved, it’s more of an investor and contractor rather than the actual boss of the canal.

But Here’s the Twist—Panama Is Pulling Back

In a surprising move, Panama recently exited the BRI, signaling a potential shift away from China. Why? A combination of unmet expectations and pressure from Washington.

Panamanian authorities, according to Henry Ziemer of the CSIS, have realized that the promised “big flashy gains” from Chinese infrastructure deals didn’t quite materialize. Meanwhile, US lawmakers have been voicing concerns that China could use its infrastructure foothold in times of conflict to block access to the canal—a scenario former US military officials have warned about.

Should the US Be Worried?

This is where the debate gets tricky. While China has expanded its economic footprint in Panama, the US still remains the dominant investor and user of the canal. In fact, three and a half times more cargo moves through the canal for US trade than for China.

However, with China’s growing influence in Latin America and its deep pockets, Washington is keeping a close watch. US companies have often been outbid or uninterested in certain projects, creating opportunities for China to step in.

So, What Can Be Said Then…

Trump’s claim that China “operates” the Panama Canal?

That’s an overstatement. China has significant economic ties and infrastructure deals in the region, but Panama itself runs the canal. That said, concerns about Chinese influence aren’t entirely baseless. The real story here is that Panama is now stepping back from its China-heavy approach, potentially reshaping the power dynamics in the region.

And the bigger question here is—will the US step up its game in Latin America to counter China’s presence, or will Beijing find new ways to stay in the mix?