Panama’s president, José Raúl Mulino (EPA/FMT image)
On March 5th, Panama and BlackRock reached a deal granting the US company control of the Balboa and Cristobal ports in the Panama Canal. While the Panamanian government granted this concession in an effort to ease tensions with the United States, it has instead instigated US President Donald Trump's further ambitions of owning all the ports. Panama’s current strategy of appeasement is ineffective in maintaining its sovereignty and, absent readjustment, could ultimately lead to a domino effect in which Trump's imperial ambitions permeate the rest of Latin America.
A US focus on the region isn’t unheard of; since the Monroe Doctrine in 1823, and the Roosevelt Corollary of 1904, the US has adopted a hands-on approach to Latin American politics. During the Cold War, the United States became heavily involved in Latin American politics, spreading capitalist ideals in the wake of communism. Notable examples include Operation PBSuccess, which overthrew the leftist Guatemalan president in favor of a right-wing dictator allied with the US, and the failed invasion of the Bay of Pigs, which hoped to depose communist dictator Fidel Castro in Cuba. Earlier, in 1904, US President Theodore Roosevelt struck an agreement with Panamanian separatists, who were striving for independence from the Colombian government, to build the Panama Canal. The deal permitted the US to construct an artificial canal in exchange for its support for Panama’s rapidly growing independence efforts. Construction was finalized in 1914, and the US controlled the “Panama Canal Zone” until 1977, when the Torrijos-Carter treaties relinquished control to Panama gradually by 1999. During the 1990s, Panama continued dealing with US intervention despite gaining canal control. In 1990, President George H.W. Bush launched Operation Just Cause, aiming to depose the military dictator Manuel Noriega, who was suspected of drug trafficking and allying with Soviet-backed governments in Latin America. The US sent troops to Panama, capturing and convicting Noreiga, causing the deaths of around 300 civilians while leaving the state with a democratic structure that has endured to this day.
Once Trump came into office for his second term, his pursuit of regional and economic security against foreign powers, such as China, led him to the canal. He argues that the Torrijos-Carter treaty is a “disgrace” to US pride, and therefore should be invalidated. In the 21st century, the US has shifted to economic control of Latin America with heavy investment in the region. From a trade standpoint, Trump’s interest in the canal is clear: access would be economically beneficial for the US, granting them control over trade and shipping in an area where 40% of US container traffic goes through. In doing so, they can obtain cheaper rates for the US and impose higher rates for their adversaries, consistent with Trump’s America First trade policy. Beyond that, Trump’s move is also motivated by a desire to hedge back against major attempts from the Chinese government to get a foothold in the region via the Belt and Road Initiative (BRI). The Chinese have helped construct several projects in Latin America, and are in the process of constructing many more in the future, threatening US power in the region. With the increase of Chinese economic expansion, the Trump administration has aggressively diverted its focus to the region to maintain the US’ regional sphere of influence and strengthen its position.
In light of Trump’s aggression, the Panamanian response has been a policy of appeasement and accommodation. Following Trump’s inauguration, the state audited two Chinese ports in the canal, both part of the BRI, to gain favor with the new administration. During Secretary of State Marco Rubio’s first mission abroad, the Panamanians granted the US free passage of warships through the waterway, allowing the US to consolidate influence and defend against rivals like Venezuela. Further attempts have been made to move closer with the US: President José Mulino has withdrawn from the BRI as a whole, coinciding with US skepticism of Chinese influence within the Canal–information Rubio brought up to the Panamanian president. This policy has continued to be problematic, as in April 2025, US troops are now set to deploy near the canal in Panamanian territory. The idea of Panamanian sovereignty has begun to slightly erode, unable to stop US authority within its territory.
Mulino’s objective has become unsuccessful; rather than neutralizing Trump’s aggression, it has failed to satiate his appetite. The day after the deal with BlackRock was announced, Trump addressed Congress, asserting that the deal implied Trump was reclaiming the canal from Panama. President Mulino has responded by accusing Trump of lying in the address. He emphasizes that “the transaction was purely commercial,” based on mutual interest, and not a form of concession. The Panamanian Canal Authority immediately rejected the claim of US warships, and a statement posted on X reaffirmed Panamanian sovereignty of the canal. Despite Mulino’s statements, the Panamanian government has been reluctant to use many of its resources to reaffirm its sovereignty in the face of US antagonism. Recently, Mulino met with US Defense Secretary Pete Hegseth in an attempt to address certain concerns. In this meeting, the US was said to have been granted a cost-neutral compensation scheme for US warships and joint military training in the canal. While the statements struck a friendly tone, the point of Panamanian sovereignty remains. The government has refused to consult the United Nations or the Organization of American States about the issue. Recently, Mulino met with US Defense Secretary Pete Hegseth in an attempt to address certain concerns. In this meeting, the US was said to have been granted a cost-neutral compensation scheme for US warships and joint military training in the canal. While the statements struck a friendly tone, the point of Panamanian sovereignty remains.
Panama’s genuflection to Trump could encourage him to force the hand of other nations in Latin America. As more and more nations in Central America have been welcoming Chinese cooperation, such as Costa Rica and Guatemala, Trump will likely turn his attention to these nations to expel Chinese influence.
This move has also worried the maritime powers that use the canal to shorten maritime trade and reduce shipping costs, such as Chile, Colombia, and Peru. The threat of US invasion and ownership of the canal could disrupt a vital shipping route, especially integral to these three nations, who rely heavily on trade with Europe and other Atlantic regions for resources. President of Colombia Gustavo Petro and Chilean President Gabriel Boric have continued to fight for the sovereignty of Panama through statements expressing unconditional support and denouncing Trump, while President Petro and Mulino are working together on other agreements, such as a bill reinforcing Panama’s sovereignty, a clean energy project, and issues on migration.
In the meantime, to push back against Trump, Panama should take a harder stance on preserving their sovereignty and avoid the horrors of further US intervention. Their policy of appeasement has only been to the detriment of Panamanians and can embolden Trump to push his limits as far as he can in Latin America. Panama must adopt a new strategy, potentially aligning closer with nations such as Canada, Mexico, and Colombia, which have already gone head-to-head with Trump on trade matters. All of these nations have responded to Trump’s aggression by appealing to international law, condemning Trump while threatening retaliation, and imposing tariffs with varying levels of success.
This could be through publicly criticizing US actions at the UN and OAS, invoking international law to defend its rights, and finding alternative economic partners, such as Mercosur, to open new economic opportunities, protect the canal, and strengthen regional independence in the wake of China and the US competition. Currently, Panama’s future is surrounded by uncertainty regarding Trump’s next steps for targeting the canal, and if they fail to reorient their current strategy, it may result in the US eventually taking full control of the canal through coercive means.