OAN Staff Brooke Mallory
3:54 PM – Wednesday, January 29, 2025
A U.S. Senate committee heard testimony from the head of the Federal Maritime Commission regarding the United States’ options for dealing with China and Chinese companies’ increased involvement in Panama—specifically the Panama Canal.
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President Donald Trump has vowed that the United States will eventually retake the Panama Canal.
Former Democrat President Jimmy Carter, who died on December 9th, 2024, made treaties with Panama back in 1977. The treaties guaranteed that Panama would be given control of the canal after 1999—ending American control, which the U.S. had exercised since 1903.
Federal Maritime Commission Chair Louis E. Sola wasted no time during the hearing, voicing several concerns on behalf of the U.S. and the Trump administration.
“We need to increase support for American companies seeking to do business in Panama and throughout the Americas. Chinese companies must not be the sole bidders on contracts,” said Sola in written testimony on Tuesday at the Senate Commerce Committee hearing on the Panama Canal.
He also added that “Chinese companies have been able to pursue billions of dollars in development contracts in Panama, many of which were physical infrastructure projects, some on or adjacent to the Panama Canal.”
Additionally, before the hearing, Senate Commerce Committee Chair Ted Cruz (R-Fla.) asserted: “The United States paid for and built the Panama Canal, but Panama is treating America unfairly and ceding control of key infrastructure to China.”
“Chinese companies have won contracts, often without fair competition, as the infamous ‘Belt and Road Initiative’ has come to Panama. China often engages in ‘debt-trap diplomacy’ to enable economic and political coercion,” Cruz continued.
“Canal profits regularly exceed $3 billion. This money comes from both American taxpayers and consumers in the form of higher costs for goods. We cannot afford to let American shippers be extorted. We cannot turn a blind eye if Panama exploits an asset of vital commercial and military importance.”
Trump has been criticized by Washington’s adversaries in Latin America for his refusal to rule out the use of military action. However, some analysts have suggested that this could be a tactic to downplay their underlying fears, knowing that Trump is not the same wishy-washy, unintimidating leader that former President Joe Biden was.
“The United States is not without options in addressing the growing presence of China and Chinese companies in Panama and throughout the Americas. Nor are we without options as they relate to the continued viability of the Canal,” Sola continued.
He also noted that maintaining the Panama Canal Authority’s independence was essential.
Meanwhile, Panama President Jose Raul Mulino has argued that the canal has been appropriately managed for global trade, including that of the United States. He stubbornly declared last week that the canal “is and will continue to be Panamanian.”
The Panama Canal handles more than 40% of the $270 billion worth of container cargo that passes through the United States each year, according to Reuters.
Following the severe impact of dry conditions on canal operations, Sola and Dan Maffei, the then-chair of the FMC, traveled to Panama in August 2024 to meet with Mulino. In a written statement that was be submitted to the Senate committee on Tuesday, Maffei claimed that the rainy season that occurred in Panama last year had pleasantly relieved severe water-supply problems “for the time-being, and [it] restored normal transit volumes.”
The History:
Leaders and businessmen in the U.S. and Great Britain sought to swiftly and economically transport commodities between the Atlantic and Pacific coastlines throughout the 1800s. In order to limit competition over a proposed canal across the Central American Republic of Nicaragua, the United States and Great Britain negotiated the Clayton-Bulwer Treaty in 1850. However, the Anglo-American canal never made it past the planning stage. French efforts to construct a canal through Panama progressed. The French started digging in 1880 under the direction of Ferdinand de Lesseps, who had previously constructed the Suez Canal in Egypt. The de Lesseps campaign was thwarted by malaria, yellow fever, and other tropical maladies, and after nine years and the loss of almost 20,000 lives, the French endeavor failed. American interest in a canal persisted despite these obstacles. The Clayton-Bulwer Treaty was revoked in 1901 by the Hay-Pauncefote Treaty, which granted the U.S. permission to construct and run its own canal. The U.S. Senate voted in favor of building the canal through Panama on June 19, 1902, after a contentious discussion over the proposed canal’s site. In less than six months, Colombian Foreign Minister Tomás Herrán and Secretary of State John Hay signed a pact to construct the new canal. The Colombian Congress rejected the offer because the financial terms were unsatisfactory. In response, President Roosevelt sent American warships to back Panamanian independence in Colón, on the Atlantic, and Panama City, on the Pacific. After Colombian troops failed to traverse the Darién Gap jungles, Panama proclaimed its independence on November 3, 1903. Philippe Bunau-Varilla, a French engineer who had participated in the previous de Lesseps canal attempt, was appointed as Envoy Extraordinary and Minister Plenipotentiary by the newly established Republic of Panama right away. In his new position, Bunau-Varilla negotiated the Hay-Bunau-Varilla Treaty of 1903, which gave the United States a 10-mile-wide strip of land for the canal, as well as an annual annuity of $250,000 and a one-time payment of $10 million to Panama. Additionally, the United States committed to ensuring Panama’s independence. The Panama Canal, which was finished in 1914, represented the economic might and technological superiority of the United States. At the time, U.S. control of the canal was hailed as a significant foreign policy accomplishment, but it later became a source of friction between the United States and Panama, according to The Historian of the U.S. Department of State.
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