Name: Why Trump Wants to Retake the Panama Canal Again
Uploaded: 2026-01-26T17:14:44.000Z
Duration: 37 min 30 s
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On 20 January 2025, Donald Trump was formally sworn into office once again as America's president.

During his inaugural address to the nation that day, Trump presented his vision of America and set forth his goals for the next four years, including re establishing American control over the Panama Canal.

Merely minutes after Trump declared during the speech that his proudest legacy would be that of a peacemaker and a unifier, Trump said that it had been a foolish decision for America to have ever given the Panama Canal back to Panama, falsely claimed that 38,000American lives have been lost during the canal's construction, said that America has been treated very badly from giving up the canal and that it should have never happened that Panama's promises to the US have been broken, that American ships using the canal are apparently being severely overcharged and not treated fairly and that above all, China is allegedly operating the Panama Canal now that America didn't give it to China, it was given to Panama, and

that America is going to take it back to thunderous applause.

These comments and threats made by the President of the United States towards Panama came on the heels of multiple previous threats before he was sworn into office, including during a 7th of January press conference at his Mar A Lago personal residence, where Trump threatened to use economic coercion to force Panama into giving up its control of the canal, and

where he very pointedly refused to rule out using military force against Panama to regain control over the canal either.

In the weeks that have followed the President's statements, there has been much speculation about what Trump actually intends to do regarding the issue.

Panama's President, Jose Raul Moulino, has stated that every square meter of the Canal belongs to Panama and will continue to do so.

And he has flatly rejected even the thought of entering into any negotiations over it.

He has also flatly rejected Trump's claims regarding Panama, allegedly overcharging US Ships and allowing China to operate the canal.

But the temperature is continuing to get hotter.

While Trump's interest in the Panama Canal is not seeming to just go away.

Trump's comments during his inaugural address concerning the Panama Canal were spoken like a late 19th century imperialist, and

they might seem like they came completely out of nowhere.

Before Trump started talking about the Panama Canal at the tail end of 2024, it hardly even registered in the minds of the American public at all, and

it barely even made it onto the list of the top 500 most pressing strategic threats to most Americans.

But quietly behind the scenes for decades, the issue of Panama's control over the canal has long been deeply contentious.

Within a sector of the United States government.

And far from coming from the 19th century, Trump's modern threats towards Panama are rooted in history.

That is far more recent than you probably think.

But in order to understand where Trump's very public threats towards taking over the Panama Canal are suddenly coming from and what could actually end up happening, it helps to understand the historical and geopolitical context behind the comets and America's own complex and controversial relationship with the country of Panama and the Panama Canal itself.

For many centuries, the idea of carving out a canal across the narrow isthmus of Panama to create a shortcut the Atlantic and Pacific Oceans was heavily contemplated, but

it was never technologically possible until the advent of the Industrial Revolution.

The first serious attempt to build a canal across Panama was started by the French in 1881.

But after nine years of enormous effort and more than 20,000 workers who died in the process, with little to show for it, the French abandoned the project by 1890 and went home.

The US government had always recognized the strategic and economic potential for a canal in Panama since before its existence.

The only way for America's navy to move ships between its east and west coasts was to sail them the extremely long way around the entirety of South America, which greatly hampered the US Navy's ability to quickly respond in force with all of its naval power at once during a crisis in either the Atlantic or the Pacific.

Even today, with modern shipping technology, the Panama Canal saves about 16 days off of a ship's travel time between New York City and San Francisco when compared to going the long way around South America.

But America's interest in a canal across Panama increased even more dramatically during the administration of President William McKinley, arguably America's last openly imperialist president and the only former president that Donald Trump mentioned at all during his 2025 inaugural address.

McKinley led the United States into a victorious war against Spain in 1898, which led to the US acquiring vast new territories around the world in Puerto Rico, Guam in the Philippines, while he also separately oversaw the US annexation of Hawaii in the same year as well.

After acquiring this vast new overseas empire at the tail end of the 19th century, America became more interested than ever in the Panama Canal project as a maritime shortcut that would enable its navy to respond more rapidly to threats to the new far flung territories.

And so, just a few Years later, in 1902, the US government began entering into negotiations with Colombia to take over the previous French led effort at building that canal shortcut across the narrow isthmus of Panama, which at the time Time was still a part of Colombia.

But after a year of negotiations, the Americans and Colombians couldn't come to an agreement on the terms of a deal.

And after the Americans grew impatient, they decided to throw their military support behind the increasingly strong Panamanian independence movement.

Instead, the US Essentially encouraged revolutionaries in Panama with promises of support to revolt against their Colombian overlords near the end of 1903.

And then they deployed the US Navy on both the Atlantic and Pacific sides of the territory to prevent the Colombians from launching an amphibious assault to reassert their authority.

With the virtually impassable dense jungle of the Darien Gaps separating Panama from Colombia by land, the large US Naval presence effectively made it impossible for the Colombians to re enter Panama and to enforce their rule of law over the territory.

Thus, depending on your point of view here, Panama became free to declare their independence or their secession from Colombia.

But there were some strings attached by the Americans for their support.

The newly independent Panama immediately entered into negotiations with their supposed protector, the United States, on the canal project.

But then, with Panama under heavy duress and with America possessing immense leverage, the US Basically threatened Panama that if they didn't agree to the heavily American favored terms of a Canal treaty, the US Would just abandon them by withdrawing their navy and all of their military protection, which would basically throw them to the wolves of the vengeful Colombian government that they had just seceded from, who would probably be quite eager to come back and crush their independence.

So effectively forced into choosing between their independence with American control over the canal or complete resubjugation under a furious Colombia, the independence leaders of Panama at the time chose the former and what they probably believed was the lesser of two evils.

So, near the end of 1903, Panama, under this duress in the United States, signed the hey Bunau Varilla Treaty, in which Panama granted the United States full sovereign control over an area of land in the country covering five miles on either side of the planned canal route in perpetuity, but

excluding the cities of Panama City in the south and Colon in the north.

This strip of land stretching clear across the Isthmus of Panama became known as the Panama Canal Zone, and

it effectively became an overseas, fully sovereign territory of the United States that enabled the US to construct the Panama Canal through it fully within sovereign American territory.

The US agreed to pay Panama $10 million up front and $250,000 a year in return for the territory in perpetuity.

And then the US finished constructing the canal through the territory a decade later.

By 1914, but at immense costs in both capital and in human lives.

The US spent nearly $500 million at the time on the Canal's construction, equivalent to about $15.2 billion in today's money, while around 5,600 workers were believed to have been killed during the American period of construction due to accidents and diseases, with the overwhelming majority of those fatalities being workers who were brought in from the Caribbean region rather than Americans.

From then on, throughout the era of American control, the Panama Canal Zone was primarily an asset of the U.S.

navy and Military that was frequently seen as vital for rapidly redeploying American military assets from the east coast to conflicts in Asia like during World War II, the Korean War, and

But the Canal Zone's status as effectively a permanent outpost of the US Military in the middle of Panama also began causing significant unrest with local Panamanians later on in the 20th century, too.

And it became a potent symbol of lingering US Imperialism in Latin America as the world entered into the Cold War.

At a little more than 1,400 square kilometers in size, the Panama Canal Zone was a little larger than the contemporary British colony of Hong Kong.

It was a heavily racially segregated exclave of the United States, full of US Military bases that sliced Panama in half geographically, complete with its own independent courts, police, and

In the 1950s, during the era of decolonization that was sweeping throughout Africa and Asia, it seemed supremely hypocritical that the United States government was openly in favor of European countries relinquishing their African and Asian colonies while they continued hanging on to the Panama Canal Zone.

And so Panamanian anger at the continued indefinite American control over a large segment of their country began evolving into protests.

And In January of 1964, the Building Anger finally reached a boiling point.

In response to the Canal Zone administration not allowing a high school in the Canal Zone to fly the Panamanian flag alongside of the American flag, a group of young Panamanian students decided that they would march to the Canal Zone's entrance and protest.

But those protests quickly evolved into multiple days of deadly riots between the Panamanian people and the US army, in which millions of dollars worth of property was destroyed and in which 22 Panamanian protesters and four American soldiers were killed and hundreds of Panamanians were injured.

The event is still regarded as a sacred occasion in Panama to this day and is still commemorated every year in the country as Martyr's Day.

After those events, Panama severed its diplomatic relations with the United States and stated that they would never be restored until the US agreed to begin negotiations on returning the Canal.

The LBJ administration in the United States at that time recognized that if the Canal continued remaining in American hands, the building anger rising in Panama, their presence would never just go away.

And they'd have to keep using the army to intervene forcefully from time to time to safeguard it, which didn't exactly look very good in the greater region of Latin America that the United States was increasingly finding itself in Cold War competition over with the Soviets.

As a result, the LBJ administration eventually came to an agreement that would have actually restored Panama's sovereignty over the Canal Zone.

But then Panama's civilian government was overthrown during a military coup in 1968 and the agreement was never ratified.

A few Years later, in 1973, during the Nixon Administration, the United States even used its position on the UN Security Council to veto a UNSC resolution that would have demanded the US return the Canal back to Panama.

The international pressure and the rising temperature in Panama itself were both mounting on the US position in Panama.

And even Henry Kissinger himself, perhaps America's most controversial ever Secretary of State, absolutely poor, poured himself into negotiations to return the Canal back to Panama.

In 1975, he famously warned the Ford Administration that there would soon be riots all over Latin America if the United States didn't renegotiate the original Canal Treaty with Panama.

This was the heated atmosphere around Panama that Jimmy Carter found himself in when he entered the presidency in 1977.

And he, more than any of his predecessors, was determined to finally resolve the issue.

Far from the naive gift that some people have since tried to paint, Carter's decision to return the Canal as it was a highly strategic decision at the time to try and improve America's global image and its relations with Latin America at a time of fierce geopolitical competition throughout the region with the Soviets.

So later on in 1977, Carter and the de facto leader of Panama at the time came together and finally signed the Torrios Carter Treaties, which were ratified by the US Senate the following year in 1978 and did several things.

The Carter Treaties dissolved the area of the Canal Zone and returned all of the land in the Zone back to Panama the following year.

While control over the Panama Canal itself would become jointly administered between both the US and Panama until the final day of the millennium on 31 December 1999, when at noon during a formal ceremony, the Canal's full control was finally handed over entirely to Panama.

The Carter treaties also enshrined a status of permanent legal neutrality over the canal, enabling it to be freely used equally by all of the nations in the while, the United States was given the authority to defend the canal's neutrality militarily if it were ever to be threatened.

But Carter's decision to hand the canal back over to Panama was not a universally popular decision.

one of the fiercest critics of the decision at the time was none other than Ronald Reagan.

When he was running for President in 1976, he made retaining America's control over the Panama Canal one of his most central foreign policy slogans, repeatedly saying in his speeches to thunderous applause, we built it, we paid for it, and

Reagan's conservative wing of the Republican Party weaponized Carter's and the Democrats decision to return the canal to Panama as an effective means to raise campaign money and enthusiasm.

But then, once he became president, Reagan never took any serious action to actually reverse Carter's decision on the issue.

It was entirely a campaign talking point for him to attack the Democrats with.

And Trump might find that his modern comments about the canal have a similar political value that he feels particularly resonates with his very pro Reagan base.

Trump's threats about not ruling out military force to take back the canal today appear to most Americans as being completely out of left field.

But most Americans have also forgotten that it wasn't really that long ago since the last time the US military launched a full scale invasion into Panama.

But pretty much every Panamanian today over the age of 40 remembers well the night of 20th December 1989 when tens of thousands of American soldiers invaded their country.

The then dictator of Panama, Manuel Noriega, had once been a close ally of the United States and was even an informant for the CIA.

But after it was revealed in the late 1980s that he was actually a drug trafficking kingpin, relations began to deteriorate and he began shifting Panama's geopolitical alignment closer to Cuba, Nicaragua and the Soviet Union.

Instead, tensions began simmering and in 1989 Noriega annulled the results of Panama's general elections that appeared to show his party losing, transitioning him into a full blown dictator in the process who is deeply unpopular with most of his own people.

bush administration demanded that Noriega step down from power, and

after an American soldier was killed by Panamanian forces at a roadblock in the country in December, the Pentagon finally decided that the time had come to remove Noriega by force codenamed Operation Just Cause, 26,000American soldiers stormed into Panama overnight on 20 December 1989 with guns blazing and rapidly overwhelmed Noriega government forces.

Noriega himself was captured and extradited to the United States to face trial in prison, while 23American soldiers were killed and another 324 others wounded.

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Why Trump Wants to Retake the Panama Canal Again

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