The Trump administration’s renewed focus on the Panama Canal Treaty stems from growing concerns over China’s expanding influence over this crucial waterway. While Panama maintains technical ownership, Chinese operations at both ends of the canal have raised significant security concerns, particularly regarding the potential for military
exploitation through dual-purpose infrastructure that could restrict access, especially for American interests.
China currently stands as the second-largest user of the canal, following only the United States. Reports suggest that Beijing’s influence may have already resulted in discriminatory pricing against U.S. transit, potentially violating the neutrality agreements established in the 1978 treaty with the United States. The Trump administration contends that these developments constitute a breach of the treaty and represent a significant threat to American economic, military, and regional interests.
This situation reflects a broader pattern in China’s global maritime strategy. Through its Belt and Road Initiative (BRI), the Chinese Communist Party (CCP) has systematically expanded its presence not only in Latin America but across strategically significant locations worldwide. The BRI, alternatively known as “One Belt, One Road,” represents a comprehensive global infrastructure and investment program designed to embed Chinese influence through the construction of essential infrastructure projects including transportation networks, ports, and energy systems.
The “Panama Strategy” exemplifies Beijing’s systematic approach to gaining control over critical maritime chokepoints and shipping routes globally. This strategy combines naval presence expansion,
BRI-facilitated influence, and the development of military
installations and artificial islands in strategic locations. The ultimate objective appears to be challenging the existing U.S.-led international trading system and its principles of free maritime navigation.
China’s maritime influence extends well beyond Panama. In the South China Sea, where approximately $3 trillion in annual trade flows, China has established artificial islands and military installations to assert regional dominance. The Strait of Malacca, crucial for China’s energy security with 80 percent of its Middle Eastern oil imports passing through, has seen increased Chinese commercial and naval activity through BRI initiatives.
The CCP has also secured significant influence in the Suez Canal Economic Zone through Egypt’s participation in the BRI, enabling monitoring of trade flows between Europe, Asia, and Africa.
Additionally, China maintains strategic positions near the Strait of Hormuz through its partnership with Iran and has established its first overseas military base in Djibouti, projecting power across the Red Sea and Gulf of Aden.
This maritime strategy, implemented since Xi Jinping’s rise to power in 2013, reflects China’s broader ambition to reshape global trade flows and secure strategic chokepoints. The strategy aims to establish Chinese dominance in four key areas: economic power, strategic military capability, global geopolitical influence, and energy security. Success in this endeavor necessarily requires diminishing U.S. global influence across these domains.
The CCP’s global maritime strategy represents a direct challenge to U.S. interests and influence worldwide. For Xi Jinping’s “China Dream” of global hegemony to succeed, it must effectively displace American dominance in these critical areas. The Trump administration’s attention to the Panama Canal situation suggests a growing recognition of and readiness to confront these challenges to American global leadership.
The potential reassessment of the Panama Canal Treaty could mark the beginning of a more assertive American response to China’s expanding maritime influence, though the ultimate effectiveness of such measures remains to be seen.