A Familiar Threat Returns

In early 2025, Donald Trump reignited old imperial tensions when he declared that the United States should retake control of the Panama Canal. Citing “exorbitant” tolls and alleged Chinese influence, Trump described the 1999 handover of the canal to Panama as “one of the worst deals in U.S. history.” He refused to rule out military force.

Panamanians were quick to respond. President José Raúl Mulino rejected the accusations outright, affirming Panama’s full sovereignty over the canal. Protesters in Panama City flooded the streets, labeling Trump a “public enemy” and accusing the U.S. of plotting a second invasion.

History Repeating Itself

The echoes are unmistakable. In December 1989, the U.S. launched Operation Just Cause, an invasion of Panama that killed hundreds, possibly thousands, of civilians. The stated goal was to capture Manuel Noriega, but the deeper context was clear: protecting U.S. strategic control over the canal as its handover deadline loomed.

Trump’s 2025 rhetoric directly taps into that legacy, including his refusal to rule out force and his framing of the canal as a national security asset under foreign threat. In March, the Pentagon confirmed it had been instructed to prepare military options to guarantee U.S. access.

The Chinese Strawman

Though Panama controls the canal, Trump has repeatedly pointed to China. A Hong Kong-based company, Hutchison Ports, operates commercial ports at either end of the canal. But these are not canal locks, and the Panama Canal Authority remains entirely independent. Still, Trump has painted the situation as a creeping Chinese takeover.

To counter this narrative, a consortium led by BlackRock is reportedly in talks to buy out Hutchison’s holdings. The optics of such a deal — American capital displacing Chinese presence — play directly into Trump’s campaign messaging and intensify the sense that this is about influence, not facts.

Diplomacy in Crisis

Panama is not a military power. But it is a sovereign country, and its people still remember 1989. Trump’s threats have triggered regional unease and brought scrutiny from Latin American neighbors, who fear a return to the days when U.S. foreign policy meant gunboats before diplomacy.

As tensions escalate, the question looms: Is this bluster for domestic consumption, or is the United States truly preparing to reassert dominance over the canal by force?

For Panama, the distinction may not matter. The shadow of 1989 is long, and the threat is already at their doorstep.