Will President Donald Trump really seek to use U.S. military force to retake the Panama Canal as he has threatened? Let’s hope not.
Given the fraught nature of retaking the canal by force or even by economic pressure, it could be justified only by the strongest of national security crises or challenges, and there seem to be none implicating the canal on the horizon.
Trump, of course, has offered his reasons — that Panama is charging too much for U.S. ships to use the canal and that China supposedly has a threatening presence near the canal — but these reasons do not call for war or even intense economic pressure on Panama. Retaking the Panama Canal by military force, as Trump has suggested, is an unrealistic and dangerous proposition that would likely result in significant political, military, and economic fallout. Alternative approaches, like addressing economic grievances or concerns about Chinese influence through diplomacy and cooperation, are more prudent than risking an invasion or imposing unilateral sanctions.
The Background
America’s story with Panama and the Panama Canal is one of geopolitics, engineering ambitions, heroic labor, and evolving sovereignty. In the late 19th century, France initially attempted to construct a canal across the Isthmus of Panama but abandoned the project due to financial troubles and tropical diseases. The United States, recognizing the canal’s strategic and economic potential, took over in the early 20th century.
In 1903, the United States facilitated Panama’s independence from Colombia by supporting a revolution. Shortly thereafter, the United States and the newly formed Panamanian government signed the Hay-Bunau-Varilla Treaty, granting the United States control of a canal zone in exchange for financial compensation. This agreement allowed the United States to complete the canal, which opened in 1914. The canal revolutionized global trade, providing a crucial shortcut between the Atlantic and Pacific Oceans, significantly reducing maritime travel time.
While the canal was an engineering triumph, U.S. control of the zone was a source of friction. By the time that President Jimmy Carter began negotiating to hand the canal over to Panama, maintaining it as an American possession had become progressively less tenable. Panamanians often viewed the arrangement as a violation of their sovereignty, leading to protests and, at times, violence.
In 1964, student protests against the American presence and the reaction by Canal Zone residents led to riots and the deaths of 22 protesters and four U.S. soldiers, an event still commemorated in Panama as “Martyrs’ Day.” As a result, during Lyndon Johnson’s administration an agreement recognizing Panamanian sovereignty was reached, but with the overthrow of Panama’s civilian president, it was never ratified. In 1973 the United States had to veto a U.N. Security Council resolution demanding it hand the canal over to Panama.
This is the climate in which the United States and Panama arrived at the 1977 Torrijos-Carter Treaties, which set a timeline for the gradual transfer of canal control to Panama. It can be argued these treaties were an act of realism to liquidate a major source of friction in the region rather than the naive gesture that some critics have depicted it as, then and now.
Few Americans remember that relatively recently, another U.S. president, George H. W. Bush, actually mounted a full-scale invasion of Panama. In 1989, the United States invaded Panama aiming to depose dictator Manuel Noriega, who faced drug trafficking charges and threatened U.S. interests by not honoring the terms of the treaties and cozying up to Cuba and Nicaragua. Although military action to remove him had been considered for some time, the murder of an American soldier at a roadblock maintained by Panamanian forces was the triggering event.
From a purely military point of view the somewhat bombastically entitled “Operation Just Cause” began with remarkable advantages. Although the 1977 treaties had called for the eventual transfer of all military bases in what had been the Panama Canal Zone to the Panamanian government, as of 1989 they were still operational and the area was still studded with U.S. installations.
The 26,000-strong U.S. force that conducted the invasion thus began from a uniquely favorable position, as transport aircraft were able to ferry troops from the United States into the bases ahead of the operation. For the most part U.S. troops in effect could commute to their main targets, governmental and military installations in Panama City. Indeed the force that assaulted the Panamanian military headquarters came out of Fort Clayton, only four miles away.
The 1989 invasion, although seen internationally as a reversion to American quasi-colonial supervision of Central America, was in fact largely welcomed by the Panamanian people. But while U.S. forces quickly subdued their opponents — upholding the treaties and restoring democratic governance in Panama — U.S. forces sustained 23 deaths and 324 wounded. About 10 years later, Panama assumed full ownership and operation of the canal.
Trump’s Complaints
So, what should we make of Trump’s grievances? On the price of transiting the canal, Panama has, of course, its counter-arguments against Trump’s charges. But even if Panama is overcharging, is saving money for the United States is something for which it is worth going to war or bringing a small country to its knees with economic pressure?
If Trump is genuinely concerned about the prices Panama is charging and not simply seeking an excuse to justify his demand for the canal to return to U.S. ownership, the two countries could undertake a serious joint study of the issue. In fact, the Panama Canal Authority has a formal advisory board, headed by a retired U.S. admiral and including shipping executives, bankers, lawyers, and academic experts that could be used for such a purpose.
The advisory board or a similarly constituted group of “graybeards” could look at such issues as future demand on the part of shippers, the relative price of current and future alternatives, the value of improvements that Panama has made in recent years, notably new locks that can be traversed by larger ships, and the impact of climate change on canal operations. And it should be remembered that if tolls have increased of late, there have also been times when they have been reduced, as was done in 2019 for certain types of vessels in the face of competition from the Suez Canal.
Panama Canal tolls have indeed been on an upward trend since 2022 — the Panama Canal Authority attributes this to the need for further “strategic investments.” This may well continue, as in 2024 the canal suffered from a drought that forced limits on the number of ships transiting and affected revenues. The canal authority is contemplating construction of a $1.6 billion dam to increase water storage capacity.
His other assertion is that the Chinese presence around the canal threatens U.S. security. This is superficially at least more plausible. Hong Kong-based firms won bids to construct facilities adjacent to the canal, and unquestionably they are beholden to the Chinese Communist Party. Leaving aside the broader issue of how the United States should respond to China’s increasing global presence, the existence of these facilities is admittedly troubling.
It is undeniable that China’s footprint in Panama has grown. Mainland or Hong Kong firms have built port facilities at both ends of the canal for which they have long term leases. A Chinese firm has constructed a bridge across the canal, and there has been discussion of a possible railroad across the isthmus. While there have been ups and downs in the relationship, it is clear that Panama recognizes that China has been and may in the future be an important source of the capital needed for its infrastructure development.
Panama, however, is but one of many sites of Chinese investment in ports around the world, which range from Cambodia to Sri Lanka, Pakistan, and Abu Dhabi. A Chinese-built and operated port is opening in Peru, which could eventually capture much of Brazil’s burgeoning trade with Asia. There even have been at times discussions of potential Chinese-built alternatives to the Panama Canal (a canal in Nicaragua and a railroad in Colombia).
Given the potential economic and strategic implications of this worldwide phenomenon, the United States may indeed need to craft a strategy to compete with China’s global push to develop and manage ports, which would entail mobilizing both public and private capital on a grand scale. But a global challenge of this nature is simply not amenable to the quick and easy solution of threatening or even engaging in military action against one weak country.
Trump has asserted that Chinese troops are present at the canal (a claim which has been described as “nonsense” by Panama’s president) and some observers have crafted scenarios of Chinese espionage and sabotage in the event of a conflict with the United States. But the reality is that in a world of ever more sophisticated spy satellites, China may not need to rely on agents based in its warehouses to see what is going on at the canal. Nor does the hypothetical threat of sabotage outweigh the dangerous reality that would be the result of recreating the canal as a U.S.-controlled enclave surrounded by angry Panamanians.
But here, too, if Trump is genuinely concerned about the Chinese presence, options exist. The United States, Panama, or the two countries together could offer to buy the facilities from their owners. If this is rejected, Panama could consider nationalizing them, while paying appropriate compensation. Under these circumstances Panama might well need significant U.S. political and economic support in the face of Chinese displeasure. But if the facilities are to remain in Chinese hands, Panama, with U.S. support, could implement additional security measures such as doing background checks on those working in them, electronically monitoring the sites, etc.
Now Not So Easy
The natural impulse is to suggest that Trump’s words ought not be taken seriously. But the words of the man who is to head the world’s most powerful military should not be shrugged off lightly. A repeat performance, this time with the aim of reversing Panamanian sovereignty over the canal, is likely to bring only grief to the United States as a potentially easy military invasion inevitably transitions into an occupation loathed by the Panamanian people. So, it is incumbent upon Americans to seriously assess the prospects of military intervention.
An operation to reassume control of the canal as contemplated by Trump would take place under extremely different circumstances from those of the 1989 action. In addition, in some ways it would be a more complicated operation. Should the United States choose to intervene militarily, its principal mission presumably would be to secure the canal and its port infrastructure completely intact. Since, unlike 1989, U.S. forces wouldn’t be operating from bases already in Panama, this would be more of a challenge.
The Panama Canal is much more than a deep trench between two bodies of water. Rather, it is a complex mechanism that includes three sets of locks, dams, pipes to move water, oil tank farms, and a lake that is one of Panama’s key sources of drinking water. Whatever local security forces, if any, may seek to impede the invaders will need to be disarmed and forces positioned along the canal (which is flanked by lush jungle) without doing any damage to this fragile system.
With U.S. bases no longer existing within Panama, an airport — perhaps the former Howard Air Force Base, now Panama Pacific International Airport — would have to be seized and combat troops funneled through it, or a Marine expeditionary unit could make an amphibious landing. Carrier-based aviation could assure that Panama’s tiny police helicopter fleet is unable to interfere with operations.
But, while an invasion to secure the canal is well within U.S. capabilities, and could be accomplished quickly, at that point the headaches would only be beginning. First and foremost, an intervention to regain control of the canal would be viewed very differently by the Panamanian people than one aimed at restoring democracy. Panama City, with a population of over one million people, lies at the canal’s Pacific entrance. The invading force might have to deal with protests, potentially violent, both initially and for an indefinite time thereafter, forcing it to become becoming a permanent occupation force. Under such circumstances, beyond seizing the canal, the invaders could well need to occupy the capital as was done in 1989. In the course of that invasion, a low-income neighborhood near the Panama Defense Forces headquarters, El Chorillo, caught fire, resulting in meany deaths. Despite this tragedy, Panamanians still largely viewed the United States as liberators, but the response to such an action now would likely be universally and ferociously negative.
And should the United States forcibly retake the canal, it might well find that protecting it is more difficult now than in the past. In addition to dealing with protesters and patrolling its length against potential saboteurs, it would also have to address the risk of easily mounted drone attacks that could damage the locks or simply threaten vessels passing through the canal to the point where they would be uninsurable. And after the seizure of the canal, there would probably be an end to current cooperation from the Panamanian government on migration pouring north from the Darien Gap. Thus, U.S. forces would need to take on the additional burden of serving as a forward-deployed border patrol.
Sanctions Offer No Panacea
Trump has also refused to rule out the use of “economic force” to regain control of the canal. While this could be initially less painful than a military invasion, it would not necessarily provide better outcomes over the longer term. Panama certainly has its vulnerabilities. The United States could cancel its free trade agreement, isolate its banking sector, and deny Panamanians visas. Perhaps an exhausted, browbeaten Panamanian government would then return the canal to the United States. But an occupying force would still be needed to protect the canal from riots, drone attacks, or other responses from an irate people.
And any sanctions against Panama would almost certainly be unilateral, with no other country joining in the effort. While sanctions have their place in the toolkit of foreign policy, they are rarely enough alone to bend one government to another’s will, especially if they are solely maintained by a single country — even one as powerful as the United States. And they take time to be effective. If Trump wants the canal back during his upcoming term, he will probably have to send in the troops.
Whether or not Trump has devoted any time to reading the classics, he seemingly shares the view expressed by the Athenian leaders in the famous dialogue with the Melians as recounted by Thucydides: “The strong do what they can and the weak suffer what they must.” The United States is vastly stronger than Panama and could take the canal back through military force or economic pressure if it so desired. But as history has shown on many occasions, even the strongest state in its arrogance can blunder into disaster. Grabbing the Panama Canal would be one of the first order.
Richard M. Sanders is senior fellow on the Western Hemisphere at the Center for the National Interest and a global fellow at the Woodrow Wilson International Center for Scholars. A former member of the senior foreign service of the U.S. Department of State, he was assigned to posts throughout Latin America and to positions in Washington dealing with the region. He also served at the Department of Defense as foreign policy advisor to the chief of staff of the U.S. Army. The views expressed here are his own and not those of any government department or agency he was formerly associated with.
Image: Brandon Fitzgerald via DVIDS
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