"We Won't Hand the Panama Canal to China"
Trump's July Remark and the Escalating US-China Tug-of-War

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On July 1, President Donald Trump again declared that the United States "will not let China take over the Panama Canal." Remarks to this effect have been repeated since before he took office, but this time the reaffirmation came in the middle of an ongoing Chinese pressure campaign of detaining Panama-flagged ships, and the level of tension has risen a notch. Rather than the canal itself, I want to reread, from the Latin American side, the US-China tug-of-war unfolding around it and the increasingly cornered position it leaves Panama in.

What happened

The trigger for this clash was a ruling by Panama's Supreme Court. The court ruled that the port-operating rights held by the Hong Kong-based conglomerate CK Hutchison at both ends of the canal were unconstitutional. Beijing reacted strongly to the decision, and China's Hong Kong and Macao Affairs Office denounced it in fierce terms as "absurd" and "shameful."

As retaliation, China took the unusual step of detaining Panama-flagged vessels at its own ports. According to the US Federal Maritime Commission (FMC), the number of detained ships exceeded 70 and was assessed as "far beyond historic levels." Panama's government has taken this as an infringement of its sovereignty, and while seeking a diplomatic solution, it has, in effect, leaned more toward the United States. Trump's "will not hand it over" was thrown into the middle of exactly this tension.

Context

China, for its part, has pushed back head-on against Trump's remark. The Chinese embassy said "the US should deeply reflect on its own coercive posture," and Beijing's consistent claim is that "China has never in any way participated in the management or operation of the Panama Canal." It holds firmly that CK Hutchison is a private company independent of the Chinese government, and that framing a company's commercial dealings as a national takeover runs counter to the facts.

The Chinese outlet Global Times has cast Washington's discourse as "political rhetoric," noting that Latin American business circles and major media also reject the phrase "China taking over." In fact, voices in Panama's business community that do not want to damage trade ties with China are strong, and here a "defend our sovereignty" sentiment coexists with a "protect our interests" calculation. What Beijing invokes is the logic of "interference in internal affairs": port operation is a matter between a private company and one nation's judiciary, and the US has no standing to intervene.

The question

For Panama, this is a sovereignty issue and, at the same time, a pressing economic one. China is one of Panama's important trading partners, and if the ship detentions drag on, the real damage to shipping and logistics operators piles up by the day. On the other hand, Panama's ties with the United States run historically deep, and the canal's neutrality is a pillar of the country's very identity. Favor either side and the other one hurts. That is the frame Panama is caught in.

Panama's position—unable to fully side with either the US or China—is also a microcosm of the geopolitical bind facing many countries in Latin America. When the Trump administration tries to carry out a modern version of the Monroe Doctrine, managing its "backyard," the question raised is an old but new one: how far is the sovereignty of individual nations actually protected? The canal is physically Panama's, but when it comes to who decides the order that passes through it, the story does not end with Panama alone.

My perspective

Watching Latin America over a long stretch, I keep recalling the history of a region repeatedly made the stage for great-power spheres of influence. The canal is something like a symbol of that. What I take most seriously in this episode is that the meaning of ships being stopped has come to exceed a mere logistics problem. The figure of 70 vessels is an anomaly in trade statistics and, at the same time, seems to press the question "which order will your country obey?" onto Panama's ports in the form of cargo.

And this bind is not Panama's alone. A double structure—accepting Chinese investment in ports and infrastructure while being unable to ignore ties with the United States on security and diplomacy—is something many countries carry, to varying degrees, from Central America to the Caribbean and South America. That is why I feel it would be a waste to read this tug-of-war only as a "Trump versus China" story. The true subject, I think, is the Latin American countries themselves, each trying to widen its own room to choose even a little in between.

Glossary

soberanía = sovereignty. A word Panama invokes again and again over the canal and the ship detentions, and a concept at the core of the region's politics. neutralidad = neutrality. The canal's permanent neutrality is bound up with Panama's identity and serves as a shield against being unilaterally folded into either the US or the Chinese order. injerencia = (internal) interference. The logic Beijing uses when criticizing US conduct, carrying the nuance of "don't meddle in another country's judiciary or commerce."

When 70 ships are stopped at port, it is no longer a question of trade but a test of which order you will obey.

※ This article is the author’s commentary based on public information. Please confirm the latest figures, dates and procedures with governments and primary sources. Quotations are kept minimal and sources are cited.