Agencies WASHINGTON

Born from "gunboat diplomacy," the Panama Canal, an engineering marvel linking the Atlantic and Pacific Oceans, now faces renewed US threats. Over 100 years after its construction and 25 years since its handover to Panama, US President Donald Trump has vowed to reclaim the canal, alleging overcharges by Panama and unsubstantiated claims of Chinese control.

“Above all, China is operating the Panama Canal,” Trump declared during his inaugural address, adding, “We gave it to Panama, not China, and we’re taking it back!”

Panamanian officials dismiss such claims but remain concerned, as the canal is central to their identity and economy. In 2024, the canal generated nearly $5 billion in profits, comprising 23.6% of Panama’s annual income, according to IDB Invest.

What is the canal?

It is a man-made waterway that uses a series of locks and reservoirs over 51 miles to cut through the middle of Panama and connect the Atlantic and Pacific. It spares ships having to go an additional roughly 7,000 miles to sail around Cape Horn at South America’s southern tip.

An effort to establish a canal through Panama led by Ferdinand de Lesseps, who built Egypt’s Suez Canal, began in 1880 but progressed little over nine years before going bankrupt. Malaria, yellow fever and other tropical diseases devastated a workforce already struggling with especially dangerous terrain and harsh working conditions in the jungle, eventually costing more than 20,000 lives, by some estimates.

The Canal’s Tumultuous History

In 1903, Panama, then a Colombian province, sought independence, encouraged by the US, which coveted a canal through the isthmus. When Colombia resisted, President Theodore Roosevelt deployed gunships to support Panamanian independence.

A treaty soon followed, granting the US indefinite rights to the canal zone, sparking resentment. Panama received an initial $10 million and annual payments of $250,000, but Panamanians were barred from the US-controlled zone.

Tensions boiled over in 1964 when riots erupted after Panamanian students attempted to raise their flag in the Canal Zone, leaving 22 Panamanians and four US Marines dead. Years of negotiations culminated in the 1977 Torrijos-Jimmy Carter Treaties, which transferred canal control to Panama on December 31, 1999.

A Symbol of Sovereignty

The canal remains vital to Panama, symbolizing sovereignty and economic independence. Though the 1977 treaties allow US military intervention to ensure its operation, any move to retake the canal would likely face global and legal opposition. Panama continues to defy threats, emphasizing its stewardship of this vital global trade artery.