On January 20th, 2025, during his second inaugural address, Donald Trump insisted the United States was going to reclaim the Panama Canal from what he characterized as a Chinese-led takeover. “We didn’t give it to China; we gave it to Panama, and we’re taking it back,” he declared, echoing statements he made in late December about the necessity of bringing the critical shipping lane back under American control. This follows weeks of repeated claims from the President about Chinese soldiers illegally operating the canal, U.S. ships “being ripped off” by exorbitant transit fees, and a now-notorious moment in which Trump declined to reassure the international community that he would not use military force to recover the Canal.

Is Trump right about the Panama Canal? The reality is more nuanced than he makes it seem, as is often the case with international treaties and complex geopolitical infrastructure, but his point about the threat of Chinese influence over the Canal is not entirely baseless. China maintains a significant presence in Panama, including key port operations and a slew of (attempted) foreign investment projects, and has made a concerted effort over the last thirty years to expand its presence in both Panama and other Latin American countries like Peru and Honduras. Beijing, however, does not in any meaningful sense operate the Panama Canal. Panamanian leadership and local officials control the waterway, and there is no tangible evidence that they are beholden to the Chinese state or have acted in a preferential way toward China. If anything, it appears that the CCP’s courting of Panama, after an early spark in 2017, was largely rejected.

Panama and its government, particularly with the 2024 presidential election of pro-America candidate José Raúl Mulino, are both partial toward and heavily economically tied to the United States. Nearly 80 percent of Panamanians have a positive view of the United States — that’s almost double their approval rating of China. The prevalence of negative Panamanian opinions on China has also more than doubled since 2018, mapping well with the narrative that they quickly found the CCP’s advances distasteful. Over 66 percent of traffic through the Canal is tied to American goods, and we are unequivocally the nation’s most important trade partner. While fees in the Canal have gone up substantially in recent years, these fees apply equally to all nations (and are largely related to volume-limiting droughts) — the charitable argument defending Trump’s claim here is that one, fees could be lower, and two, since the U.S. constitutes the vast majority of canal traffic, the fees apply disproportionately to American companies.