Trump Vows to Block China From Controlling the Panama Canal

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Trump Repeats Warning at Roosevelt Library Opening

Speaking on Wednesday at the opening of the Theodore Roosevelt Presidential Library in Medora, North Dakota, President Trump said the United States would not let China take over the Panama Canal. He also criticized the 1977 treaties that transferred control of the canal from the US to Panama, calling the decision a mistake. Trump argued that Panama raised transit fees sharply after taking charge of the waterway, a claim he has repeated since returning to office.

The canal, which connects the Atlantic and Pacific Oceans, handles about 5% of global maritime trade and roughly 40% of all US container traffic each year. That makes it one of the most strategically important shipping routes in the world.

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A Year-Long Standoff Over Chinese-Linked Ports

Trump's comments build on a dispute that has simmered since he returned to the White House in January 2025. During his inaugural address, he claimed China was "operating" the Panama Canal and vowed to "take it back." At the center of the dispute are two port terminals, Balboa and Cristóbal, located at opposite ends of the canal and long operated by Panama Ports Company, a subsidiary of the Hong Kong conglomerate CK Hutchison.

Under Chinese national security law, Beijing holds sweeping authority over companies based in Hong Kong. US officials, including Secretary of State Marco Rubio, have pointed to this legal reality as evidence that CK Hutchison's port operations could be leveraged by the Chinese Communist Party for strategic purposes, regardless of the company's private ownership. The concern reflects a broader pattern: the CCP's national security law has increasingly been used to extend Beijing's reach over Hong Kong-based businesses and institutions, raising alarm among human rights groups who have long warned about the erosion of the city's autonomy.

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Panama's Top Court Strips Hutchison of Its Ports

In January 2026, Panama's Supreme Court ruled that the concession contracts allowing CK Hutchison to run the two terminals were unconstitutional, following an audit that alleged the company had underpaid the Panamanian state by more than a billion dollars over the life of the concession. Panama's government formally annulled the contracts the following month, handing interim control of the ports to Denmark's Maersk and Switzerland's Mediterranean Shipping Company (MSC).

CK Hutchison has rejected the ruling and launched international arbitration proceedings against Panama, calling the move an unlawful seizure of its assets. Beijing reacted sharply as well, with China's foreign ministry warning that Panama would "pay a heavy political and economic price" unless it reversed course.

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The Stalled BlackRock-MSC Deal

The court ruling also complicated a separate, much larger transaction. In March 2025, CK Hutchison had agreed in principle to sell 43 ports worldwide, worth roughly $23 billion, to a consortium led by the US asset manager BlackRock and MSC's terminal arm, Terminal Investment Limited. The Panama terminals were originally part of that package.

Beijing objected to the sale from the start and pushed for the Chinese state-owned shipping giant Cosco to join the buying group, reportedly demanding a majority stake in parts of the deal at one point. That demand has repeatedly threatened to derail the transaction. Executives at CK Hutchison have said talks with BlackRock and MSC continue despite the turmoil in Panama, though the future shape and ownership of the deal remain unclear.

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Part of a Broader Push Against Beijing in the Americas

The Panama Canal dispute is widely seen as the opening move in a wider Trump administration effort to curb Chinese economic influence across Latin America and the Caribbean, sometimes described by officials as reasserting US primacy in the Western Hemisphere. China has spent the past decade building deep economic ties in the region, including port, energy, and telecommunications projects backed by state-owned firms.

Critics of Beijing's expanding footprint argue that Chinese state-linked investment often comes bundled with political leverage, pointing to the Chinese Communist Party's track record of pressuring foreign governments and companies to align with its interests. Supporters of the Trump administration's approach frame the canal dispute as a necessary correction after years of insufficient scrutiny of Chinese-linked infrastructure investment in the hemisphere.

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What Comes Next

With Panama's ports now under interim Western control and CK Hutchison pursuing arbitration, the immediate flashpoint over the canal itself has cooled somewhat. But the broader ownership battle over CK Hutchison's global port network, and Beijing's insistence on a seat at the table, remains unresolved. Trump's renewed remarks in North Dakota suggest the administration intends to keep the issue in the spotlight as a symbol of its wider strategy to counter Chinese influence closer to US shores.

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Sources:

1. https://www.aljazeera.com/news/2026/1/30/panama-court-rules-chinese-control-of-canal-ports-unconstitutional
2. https://www.cnn.com/2026/02/05/china/us-china-panama-canal-analysis-intl-hnk
3. https://www.cnbc.com/2026/02/24/panama-officially-voids-annuls-ck-hutchison-contracts-interim-control-maersk-msc-canal-dispute.html
4. https://www.axios.com/2026/01/21/panama-canal-ports-blackrock-trump
5. https://www.reuters.com/world/china/trump-says-us-will-not-let-china-take-over-panama-canal-2026-07-01/

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