- Trump administration renews claims of Chinese interference in canal operations
- 1999 canal handover under Carter treaty remains political flashpoint
- BlackRock-led consortium acquires critical ports near waterway
- Panama maintains full sovereignty despite US security concerns
- Hegseth's visit coincides with Central American security conference
The geopolitical chess match over the Panama Canal intensifies as Defense Secretary Pete Hegseth prepares for high-stakes meetings in Panama City. This diplomatic push follows former President Trump's repeated assertions that China gained undue influence over the vital shipping corridor since its 1999 transfer from US control. Analysts note the timing coincides with BlackRock's recent acquisition of strategic port assets previously held by a Hong Kong conglomerate.
Historical context reveals why this 50-mile waterway remains contentious. Built between 1904-1914 at cost of 5,600 worker lives, the canal handled 14,000+ transits annually pre-pandemic. Under 1977 Carter-Torrijos treaties, full Panamanian control took effect December 31, 1999 - a date Trump called the worst real estate deal in historyduring his presidency. Current Panamanian officials counter that canal operations generate $2.5 billion annually for their economy without foreign interference.
Industry experts highlight three critical developments reshaping canal dynamics: First, BlackRock's port acquisitions now control 22% of global shipping container capacity. Second, expanded Neopanamax locks (completed 2016) doubled transit capacity to 600 million tons yearly. Third, 38% of US Gulf Coast energy exports now transit the canal versus 12% pre-2010. Who controls the chokepoints controls global trade,noted Maritime Strategy Institute director Elena Marquez.
A regional case study from Egypt's Suez Canal shows the risks of foreign influence. After a Chinese company acquired Sokhna Port in 2020, cargo fees increased 18% within two years. Panama's legislature has implemented safeguards limiting any single foreign entity to 15% stake in canal-adjacent infrastructure. However, the new BlackRock deal - pending government approval - would give US-linked operators 51% control of Atlantic/Pacific entry ports.
Hegseth's agenda includes bilateral talks on narcotics trafficking and migration patterns, but canal security dominates discussions. Pentagon officials confirm plans to deploy new AIS (Automatic Identification System) monitoring tech along the waterway. While Panama welcomes anti-smuggling assistance, President Cortizo recently stated: Our canal technicians train in the US, but operational decisions remain 100% Panamanian.
The diplomatic dance continues as both nations balance economic priorities with strategic interests. With 70% of canal traffic either originating or destined for US ports, Washington maintains keen interest in smooth operations. Meanwhile, China's Cosco Shipping retains 9% market share in Panamanian port operations - down from 23% in 2020. As global trade routes shift, this Central American nation remains pivotal to 21st-century maritime power dynamics.
