18.11.2025, Aleksandrovskoye.
It turned out that the return of the US to the Latin American and Caribbean Region faces certain difficulties
With the coming to power of US President Donald Trump, it became clear that the United States is returning to Latin America. The USa is actively seeking a change of power in Venezuela, increasing pressure on the Colombian president, returning to its old military bases, and negotiating the establishment of new ones.
Even before the start of his second presidential term, Trump stated the need to regain control over the Panama Canal. What is the reason for the escalating situation in a region the US once considered its “backyard” (and wants to regain its control over it) and what role does the Panama Canal play in this?
First and foremost, the White House is concerned about China’s growing influence in Panama. China is indeed systematically pursuing its policy of expanding global influence and has already declared that it does not mind making Panama part of the new “Silk Road.” China is significantly increasing its economic and infrastructural presence in the region and repeatedly states that the Panama Canal must maintain its neutral status.
Why is the Panama Canal so important for the United States and China?
Panama Canal as vital maritime artery
Before the construction of the Panama and Suez Canals, maritime logistics was difficult: key maritime trade routes circled Cape Horn in South America and the Cape of Good Hope in Africa. In South America, ships were forced to undertake the difficult and dangerous passage through the Drake Passage, located south of Cape Horn — the southernmost point of the Tierra del Fuego archipelago. In this place where the Pacific and Atlantic Oceans meet, the climate is treacherous: the average wind speed is 43 m/s, corresponding to a Category 1 hurricane. Sailors call these latitudes the “Roaring Forties.”
The construction of the canals greatly simplified maritime logistics. The Panama Canal allowed merchant ships to avoid the long and dangerous detour around South America.
The Panama Canal made the sea route from the US to Europe, India, China, and Japan shorter, faster, and safer. From its construction to the present, the Panama Canal has been a vital artery of global logistics. One consequence of the canal’s construction was that the coastline of South America was left far from the altered sea routes of world trade.
Today, the canal has enormous influence on the economy of the Western Hemisphere and the entire world. It accounts for 2.5% of world maritime trade and 40% of US container traffic. The canal nearly halves the sea route from the US East Coast to the West Coast (from 22.5 thousand km to 9.5 thousand km). Thanks to the canal, the average travel time from Asia to the Atlantic has decreased from 39 to 26 days.
Since its construction, the Panama Canal has been controlled by the United States, which primarily uses it. 71.5% of the cargo transported through the canal is destined for the USA. Other active users include China, Japan, and others. They use the canal for transporting oil and petroleum products, and for container shipping. Around 14,000 ships pass through the canal annually; the canal is so overloaded that passage slots are sold at auction.
Importance of the Panama Canal for the United States
For the United States, the Panama Canal is important not only economically, but also politically and historically; it became a symbol of US power and a personal triumph for President Theodore Roosevelt.
Construction of the canal took place from 1904 to 1920. This was an era of major engineering projects. At first, the French — who had built the Suez Canal (opened in 1869) — wanted to build the Panama Canal, but their attempt failed. A major financial scandal erupted in France; Ferdinand de Lesseps, builder of the Suez Canal, died, and the reputation of engineer Gustave Eiffel suffered greatly. Around 800,000 French investors lost their funds in shares and stakes of the Panama Canal Company, totaling about 1.8 billion gold francs; the word “Panama” became associated with large-scale financial fraud.
The United States seized the initiative. Initially, the US attempted to lease land on the Panamanian Isthmus — this was the Hay–Herrán Treaty between the US and Colombia (at the time, the Isthmus belonged to Colombia). Colombia refused to ratify the unfavorable treaty, and the US resorted to “gunboat diplomacy”: it found and supported a separatist movement in Colombia and sent warships to its shores, including the Nashville, commanded by John Hubbard. (Today warships are stationed off the coast of Venezuela.)
On November 2, 1903, US Navy ships anchored off the city of Panama, and on November 3, independence from Colombia was proclaimed. The US recognized the new state three days later.
The United States obtained the right to build and further operate the canal at the moment the territory separated from Colombia. On November 18, the Hay–Bunau-Varilla Treaty was signed between Panama and the US. Bunau-Varilla was the French engineer who somehow arrived at the signing site two hours before the Panamanian delegation and signed the treaty on behalf of Panama. Since then, he has been called the “Panamanian ambassador” in all documents. Under this treaty, the US guaranteed Panama’s freedom, but received all rights to build and operate the canal, as well as the right to intervene in Panama’s internal affairs in case of threats to the canal. The US claimed control not only of the canal but also of the adjacent territories five miles on each side.
Roosevelt wrote in 1915 that it was difficult to reach an agreement with the Colombian rulers and, therefore, he did what he had to do, disregarding them. According to Roosevelt, the people of Panama wanted the canal and wanted independence from Colombia. Had they not revolted, he would have recommended that Congress seize the Isthmus by force. According to Roosevelt, when the uprising occurred, he immediately used the fleet to prevent the rivals who attempted to delay the USA, force it to spend months in useless bloodshed, which would have harmed the Isthmus, the USA, and the whole world. He consulted no one — neither Hay, nor Root, nor anyone else — because he wanted to get the job done once and for all.
A century has passed, but the arrogant attitude of the United States toward the region has not changed. Trump also did not consult Congress before sending an armada of warships to the Caribbean Sea to fight drug trafficking. In October alone, 37 people were killed without trial or investigation.
Construction of the Panama Canal began in 1904 and the canal was officially opened on June 12, 1920.
On September 7, 1977, US President Jimmy Carter and Panamanian leader Omar Torrijos signed the Panama Canal Treaty and the Neutrality Treaty. Under these treaties, the U.S. renounced control of the canal by 2000 and guaranteed its neutrality.
The Torrijos–Carter Treaty began the transfer of control over the canal to Panama. According to the treaty, the US received “the rights to manage, operate, and maintain the Panama Canal, its complementary works, installations, and equipment and to provide for the orderly transit of vessels through the Panama Canal,” allowing the USA to “make and enforce all rules pertaining the passage of vessels through the Canal and other rules with respect to navigation and maritime matters.”
The treaty stated that the Republic of Panama declares the neutrality of the Panama Canal so that in both peacetime and wartime it would remain safe and open for the peaceful passage of ships from all nations on equal terms.
Yet the US secured privileges for itself, “In recognition of the important contributions of the United States of America and of the Republic of Panama to the construction, operation, maintenance, and protection and defense of the Canal, vessels of war and auxiliary vessels of those nations shall, notwithstanding any other provisions of this Treaty, be entitled to transit the Canal irrespective of their internal operation, means of propulsion, origin, destination, armament or cargo carried. Such vessels of war and auxiliary vessels will be entitled to transit the Canal expeditiously.”
The treaty came into force on October 2, 1979, and provided a 20-year period during which Panama would gradually take on greater responsibility for the canal’s operation. By December 31, 1999, the US agreed to withdraw its troops, after which the canal came under full Panamanian control. Since then, the canal has been administered by the Panama Canal Authority (ACP).
China Comes to Latin America
Until 2012, China adhered to the doctrine of “peaceful development,” which stated that China’s growing political, economic, and military power posed no threat to the international community. It was replaced by the doctrine of “Great Changes Unseen in a Century,” reflecting China’s superpower ambitions.
The shift occurred amid geopolitical changes: China was gaining strength, the US was weakening, and this brought China new opportunities and threats. In 2018, General Secretary Xi Jinping stated that China was experiencing its best period of development since the beginning of the modern era, while the world was facing unprecedented changes in a century. Xi used the term during his meeting with Russian President Vladimir Putin in March 2023.
In 2013, China announced the launch of the “One Belt, One Road” strategy. This strategy became part of the new approach in China’s foreign policy — Xi Jinping’s so-called “Major-Country Diplomacy,” set forth in the same year. This approach established a more active role for China on the world stage in reforming the international order, openly competing with the West, and taking on greater responsibility for global affairs in accordance with its growing power and status. China now had reasons to enter Latin America.
The “One Belt, One Road” strategy is rooted in China’s ancient Silk Road. The Great Silk Road was a route China built starting in the 2nd century BCE. Initially, it was a caravan road linking East Asia with the Mediterranean in antiquity and the Middle Ages. It began in Chang’an (modern Xi’an) and led through Lanzhou to Dunhuang, where it split: the northern route passed through Turfan, then crossed the Pamirs and went to Fergana and the Kazakh steppes; the southern route passed near Lake Lop Nur along the southern edge of the Taklamakan Desert through Yarkand and the Pamirs (southern part) into Bactria, and from there into Parthia, India, and the Near East as far as the Mediterranean Sea.
Senior fellow for geoeconomics at the Council on Foreign Relations Jonathan Hillman explains that “One Belt, One Road” initiative is something more than just roads, railways, and other physical infrastructure. He insists that it is also a tool by which China can set new rules, create institutions reflecting its interests, and reshape the ‘soft’ infrastructure. If China can transport goods, it can transport troops, Hillman added.
Xi Jinping announced the launch of the “One Belt, One Road” project in Kazakhstan in 2013; since then, it has become a central element of China’s modern foreign policy. The New Silk Road project is so important that it has even been written into the charter of China’s Communist Party.
In 2017, the “Belt and Road Forum” in Beijing discussed two key areas of development: the land and maritime components of the new Silk Road. The discussion concerned creating a Chinese planetary network for direct shipments of goods from East to West.
Under this initiative, China extended “routs” into Latin America and has been actively developing ties with the region, including Panama.
On June 12, 2017, Panama announced the severance of diplomatic relations with Taiwan and the establishment of relations with China, officially recognizing the “One China” policy. On November 17, Presidents Varela and Xi Jinping signed 19 agreements between Panama and China, including a “Memorandum of Understanding on Cooperation within the Initiative ‘Economic Belt of the Silk Road’” and the “21st Century Maritime Silk Road.” “I am confident that China and Panama will establish very strong relations that will go far beyond both countries and help bring stability and peace to the region,” Varela said.
Varela also emphasized that the United States is Panama’s strategic ally. The then Panamanian leader did not see a contradiction between the “One Belt, One Road” policy and good strategic relations with the US.
In May 2025, China hosted the leaders of Latin American and Caribbean countries at a summit in Beijing, where Chinese President Xi Jinping announced a $9 billion investment credit line for the region.
Currently, a deal is being discussed between major players (Hong Kong company Hutchison and an American consortium led by investment fund BlackRock) for the purchase/sale of the Balboa and Cristóbal ports located at the ends of the Panama Canal. But that is a topic for a separate discussion.
The Canal of Discord
After many years of weak policy toward Latin America, the US realized that its main geopolitical rival had come too close to a strategically important point of global influence.
Aside from economic significance, the Panama Canal and its ports have vital military importance. The canal was actively used for military purposes during World War II. Washington also actively shipped military cargo through the Panama Canal during the Korean War (1950–1953) and the Vietnam War (1955–1975). After transferring control of the shipping route to Panama, the United States retained the right to transit its military vessels through it.
Therefore, Washington has justified concerns that Chinese economic activity around the Panama Canal could evolve into the ability to control this strategically important point, especially if conflict between the two superpowers intensifies.
The US declared that it intends to take the canal back. At his inauguration on January 20, 2025, Donald Trump said, “Panama’s promise to us has been broken. The purpose of our deal and the spirit of our treaty has been totally violated. American ships are being severely overcharged and not treated fairly in any way, shape, or form. And that includes the United States Navy. And above all, China is operating the Panama Canal. And we didn’t give it to China. We gave it to Panama, and we’re taking it back.”
Thus, a situation has arisen in which a weakening superpower faces the risk of losing its influence at a strategically vital point. And a rising China cannot help but attempt to establish control over this point, increasingly revealing its true intentions.
This is a translation of the article by Mariya Trubnikova first published on Rossa Primavera News Agency‘s website.
