Who Controls the Panama Canal And Why the U.S. Might Want It Back
- Yastika Chouhan
- Feb 5
- 3 min read
For almost 30 years, Panama has owned and operated the Panama Canal—a shortcut between the Atlantic and Pacific Oceans that makes global trade way faster and cheaper. But now, some U.S. politicians, including President Donald Trump, are talking about changing that. Why? Because China is getting more involved in Latin America, and some people in the U.S. think that’s a problem.
A Quick History Lesson
The Panama Canal was originally built by the U.S. in the early 1900s. Before that, if ships wanted to get from New York to California, they had to travel all the way around South America. The canal cut that trip in half. For most of the 20th century, the U.S. controlled the canal, which gave it a lot of power over global trade.
Then, in 1999, after decades of debate, the U.S. handed over the canal to Panama, as promised in a treaty signed back in the 1970s. Since then, Panama has been in charge.
So, What’s the Problem?
Today, China is one of the biggest users of the Panama Canal. Chinese companies have invested in Panama’s ports, infrastructure, and trade. Some U.S. politicians, especially President Trump, see this as a threat. They worry that China could use its influence to gain control over the canal or use it to pressure other countries. Trump has even suggested that the U.S. should "take back" the canal to stop China’s influence from growing.
How Does This Affect You?
At first, a political fight over a canal in another country might not seem like something that impacts your life. But think about the products you buy—your phone, your sneakers, even your favorite snacks. Many of those things come from Asia, and guess how they get here? That’s right—the Panama Canal.
If tensions between the U.S. and China get worse, and trade through the canal is disrupted, it could make everything more expensive. Shipping delays could mean waiting longer for the latest iPhone or that new pair of Jordans, items manufactured in China, and would also make those already expensive items even more so. Even gas prices could go up even more than they have already, which affects everything from rideshares to plane tickets for family vacations.
Plus, if the U.S. and China continue competing for power in places like Panama, it could add to global instability, making international conflicts more likely in the future.
Could the U.S. Really Take It Back?
The short answer? Not easily. The canal belongs to Panama, and it’s not like the U.S. can just walk in and reclaim it. Doing so would create major political and possibly military conflict. Plus, Panama has no interest in giving it up. The canal is a huge source of money and point of pride for the country.
However, the U.S. could try to negotiate deals with Panama to limit China’s involvement. It could also invest more in Latin America to compete with China’s growing influence.
What This Means for the Future
The Panama Canal might seem like just a waterway, but it’s actually a symbol of power in global politics. If tensions between the U.S. and China continue to rise, control over key trade routes like this one could become an even bigger issue. For now, Panama is in charge. But as China and the U.S. compete for influence in Latin America, the canal could once again become a major point of conflict—one that might affect everything from the price of your next online order to the stability of the world economy.
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