Concretely Addressing China’s de Facto Control of the Panama Canal Is Long Overdue

Concretely Addressing China’s de Facto Control of the Panama Canal Is Long Overdue
Two cargo ships pass each other during their entry and exit to the Panama Canal at the Pacific Ocean near Panama City on Oct. 6, 2024. Martin Bernetti/AFP via Getty Images
Mike Fredenburg
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Commentary
Contrary to assertions made by Panama’s president and some fact-checkers who have mistakenly focused on Panama’s legal/de jure control of the Panama Canal, President-elect Donald Trump is correct in his assertion that China’s de facto control over the Panama Canal is a national security threat.

Indeed, Beijing’s de facto control put China in a position to be able to cripple the U.S. Navy’s ability to respond to worldwide events should Chinese leader Xi Jinping decide such an action is warranted.

The idea that this is not the case because the company managing and operating the Panama Canal’s two most important ports is a “Hong Kong” company and not a Chinese company, and this “Hong Kong” company does not legally control the Panama Canal does not stand up to scrutiny.

Likewise, Panamanian President José Raúl Mulino’s implied assertion that Chinese military and intelligence assets aren’t embedded into port operations simply because such assets are not wearing their People’s Liberation Army uniform or carrying cards identifying themselves as intelligence assets of the Chinese Communist Party (CCP) is not one upon which Trump can responsibly base U.S. security.

Of course, Hong Kong has been returned to Chinese control, and it must be assumed that any “Hong Kong” company answers to the CCP. Hence, given the growing tensions with China, the current national security situation presented by CCP influence and control in Panama is intolerable and needs to be rectified.

The preferable course is for Panama to admit that allowing China to gain such control over the canal violates key provisions of the Panama Canal Treaty and moves to come into compliance with the treaty as quickly as possible. The far less preferable but still fully justified course is for the U.S. military to forcibly restore control over the Canal Zone, which was built and paid for with American lives.

Yes, the Panama Canal’s military and economic importance warrants such an action.

About 14 percent of U.S. maritime trade and 40 percent of U.S. container ship traffic flow through the Panama Canal. But even more importantly, the primary reason the United States expended 38,000 lives to build the canal was to provide a quick way for U.S. Navy ships to move from the Atlantic to the Pacific and vice versa.

Some will argue that the fact that our supercarriers cannot transit the canal, including the new canal and locks built in parallel to the original Panama Canal, makes it no longer essential to the United States. This is untrue; our carriers, unlike our other conventionally powered Navy warships and support vessels, are nuclear-powered and can steam at 30 knots continuously to move from one ocean to another in a matter of two to three weeks without having to refuel.

The destroyers and other Navy ships, including those that make up carrier strike groups, are typically limited to under 20 knots. Because they need to refuel, they are much slower than our carriers when it comes to making their way around South America or North America. Consequently, the fact that the vast majority of U.S. Navy ships can transit the Panama Canal makes it very strategically important to the United States.

Some might argue that Hutchison Whampoa Limited (HWL) has been managing and operating the ports of Balboa and Cristobal, which are located on the Pacific and Atlantic sides of the Panama Canal, since 1997.

So why is Trump making such a big deal about it now?

There are several reasons. First, when the Hong Kong-based HWL formed the Panama Ports Company in 1997 to manage and operate the two most important canal ports, Hong Kong had just begun transitioning from British to Chinese control. While it took some time for China to gain full everyday control of Hong Kong, it still has Hong Kong fully under its thumb today.

Consequently, all Hong Kong companies operate at the discretion of the Chinese Communist Party. But for the company, evidence of CCP influence goes beyond merely being part of China. Indeed, congressional testimony dating back as far as 1999 expresses concerns that billionaire Li Ka-shing, the owner and CEO of HWL, had strong ties to the CCP.

Second, the CCP’s growing influence in Panama has made it increasingly foolish for the United States to rely on Panama to safeguard its canal interests, especially given the long-established, strategically placed Chinese asset, HWL, in the Panama Canal Zone.

Third, over the last 28 years, the nature of the U.S.–China relationship has changed dramatically and become more strained as the Chinese regime has become more hostile, and even as many in the United States have come to the conclusion that the U.S. policy of constructive engagement has not only failed but actually supercharged the regime’s rise to being an economic and military superpower.

Fourth, the Chinese regime’s increasingly aggressive and illegal actions in the South China Sea, as well as threats to crush the thriving democracy known as Taiwan, have made it clear that the regime is willing to engage in actions that significantly increase the chances of armed conflict with the United States and its allies.
Finally, allowing China to continue to encroach on what absolutely should be an American sphere of influence and control—Latin America—will lead to further encroachments that diminish U.S. power and influence while increasing the chances of armed conflict.
While it is unknown what solutions the Trump administration will use to resolve this security issue, Trump was absolutely correct in responding with a firm “no” when asked if he would rule out economic or military coercion to gain control of Panama.

Further, any actions Trump might take must viewed in the context that the Panama Canal and its zone, built with American blood and treasure, turned a well-nigh worthless jungle into an economic zone that generates at least 7.7 percent of Panama’s economy and that the zone was gifted to Panama by the United States under the condition that it be kept neutral and the ability for U.S. Navy ships to transit the canal be protected.

What’s more, because the world is a much different place than when the treaty giving away a critical security asset was barely passed by the Senate in 1978, Canal Zone security now needs to be fully under U.S. control.
Trump is 100 percent justified in putting the Panama Canal situation front and center as a national security threat. While not directly addressed by the president-elect, it is shameful that the U.S. foreign national security establishment didn’t toss in the billion or so dollars that it would have taken to ensure that the Panama Canal expansion completed in 2016 was able to accommodate our supercarriers.
This egregious oversight is just another example of the misplaced priorities of what some describe as the foreign policy blob leading to failures in the basics of national security, such as failing to counter China’s push to gain power and influence in Latin America, even as we exhaust ourselves pursuing ambitious, highly destructive endeavors that damage U.S. security and national interests such as our proxy war on Russia.
Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Mike Fredenburg
Mike Fredenburg
Author
Mike Fredenburg writes on military technology and defense matters with an emphasis on defense reform. He holds a bachelor's degree in mechanical engineering and master's degree in production operations management.