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Donald Trump plans to reclaim the Panama Canal, citing its strategic importance. The canal, handed to Panama in 1999, remains contentious.
A cargo ship waits near the Centennial Bridge for transit through the Panama Canal locks in Panama City on January 17, 2024. (AP Photo)
The Panama Canal, one of US’s greatest engineering feats, may soon become the focal point of a new geopolitical struggle. After Donald Trump’s recent announcement during his first address to Congress in 2025, the world is questioning whether the United States could indeed reclaim this vital waterway from Panama.
In his speech, Trump declared that unlike the era of former US President Reagan, US now possesses the technology to build a powerful military force akin to Israel’s, and were committed to safeguarding the citizens. US will bolster the shipbuilding sector – both commercial and military, he said, adding that a new office will be established within the White House to accelerate these efforts. “As part of our national security strategy, we will reclaim the Panama Canal. This process is already underway with a major US company set to purchase both of the canal’s ports,” he stated.
Trump’s remarks were a direct reference to the controversial decision made decades ago when the United States handed control of the canal to Panama for just $1. The decision, initially signed under former US President Jimmy Carter’s administration in 1977, remains one of the most debated agreements in the country’s foreign policy.
Trump noted the immense human and financial cost of constructing the canal, with more than 38,000 workers losing their lives during its construction due to diseases like malaria, and an expenditure of approximately $287 million, equivalent to a staggering Rs 20,37,31,49,82,578 today.
The Construction of Panama Canal
The Panama Canal was originally envisioned as a way to connect the Atlantic and Pacific Oceans, vastly improving global shipping routes. Construction began in 1881 under French leadership but was halted due to technical challenges and high mortality rates among workers. By 1904, the United States took over the project, which was completed in 1914. The canal’s completion marked a new era of American economic and strategic influence, cementing the US as a global maritime power.
The project involved cutting through the Isthmus of Panama, overcoming numerous engineering challenges, and employing thousands of labourers, primarily Americans. The cost of the canal – both in terms of money and lives – was astronomical. However, the strategic value it offered was undeniable, positioning the US as a dominant player in global trade and military movements across the Western Hemisphere.
The Carter Administration’s Controversial Decision
The turning point came in 1977 when former US President Carter and Panama’s leader, Omar Torrijos, signed the Torrijos-Carter Treaties. These agreements set the stage for the canal’s transfer to Panama on December 31, 1999. The US government, then under Carter, argued that retaining control over the canal was no longer in the nation’s best interest. Panama had long pressured the US for sovereignty over the canal, and political instability in the region was seen as a growing risk if the US refused to negotiate.
However, this decision was far from universally supported within the US political establishment. Many viewed the handover of the canal as a historical mistake, believing that it weakened America’s influence in the region and endangered its strategic control over the crucial maritime route.
When the US officially transferred the canal’s ownership to Panama in 1999, the agreement included a symbolic payment of just $1. This nominal sum was highly controversial at the time, as critics argued that the US had essentially surrendered its control over a critical asset with limited compensation in return. The Panama Canal quickly became a hub for foreign investment, with China-backed companies increasing their presence in the region, further diminishing American influence over this vital trade route.
Can the US Reclaim the Panama Canal?
Given the aggressive stance taken by Trump’s administration, many are now asking whether the United States can feasibly regain control of the Panama Canal. While the canal is still owned by Panama, Chinese investments and growing influence in the region have raised concerns about the US’s diminishing leverage over the area.
Reclaiming the Panama Canal would likely require either a new treaty with the Panamanian government or the use of military pressure, both of which would trigger significant global political repercussions. Trump’s declaration suggests that the US is preparing to take bold steps to correct what many view as a major misstep in US foreign policy.
Trump’s announcement signals that the US is ready to adopt a more aggressive approach to address what it sees as a long-standing error in its handling of the canal. If the US moves forward with its plan to regain control, it could ignite a shift in global power dynamics, potentially reshaping both regional and international politics in the years to come.
