Tourists visit a monument marking 150 years of Chinese presence in Panama, near the Bridge of the Americas and Balboa Port on the Panama Canal in Panama City, on March 9, 2025. Chinese Panamanians, descendants of early immigrants, make up about 4% of the country’s 4.5 million people and serve as a diplomatic bridge with China. Today, Panama is pulled into a geopolitical competition between two superpowers: the United States and China.
Aram Cisneros, a former ambassador for the government of Panama, could not believe his ears when he first heard then President-elect Donald Trump mention “taking back” the Panama Canal in December 2024.
He said he thought Trump must be kidding. But that changed after Trump assumed office.
“My jaw dropped when I heard his inaugural speech,” Cisneros said. “I went like, wow. He’s not joking.”
Trump has publicly said multiple times that the U.S. would take the canal back, by force if necessary, because Panama had allowed China to “control” the canal, an accusation disputed by Panamanian and Chinese officials – and most experts on canal operations.
But the presence and growing influence of China in Panama and, more broadly, in Latin America has for years been a concern of multiple U.S. presidential administrations, and officials from both major U.S. political parties.
Since Trump took office, U.S. officials have pressured Panama to weaken its ties to China.
Following Secretary of State Marco Rubio’s visit to Panama in February, two significant developments occurred. First, Panama announced it would not renew its participation in the Belt and Road Initiative (BRI), a flagship program launched by Chinese President Xi Jinping in 2013. Panama was the first Latin American country to join the BRI in 2018, a year after establishing diplomatic relations with Beijing. Second, CK Hutchison, the Hong Kong-based company that owns ports on both sides of the canal, announced that it would sell its share of the ports to BlackRock Inc., a U.S.-based investment company. The deal is currently under review by the Chinese government. CK Hutchison’s ownership of the ports had led to the U.S. accusations that “China is running the canal.”
Even after these moves, the Trump administration has continued its tough rhetoric on the canal.
“Maybe he thinks that’s not enough and he’s waiting for something with a little more substance,” Cisneros said. “I don’t know what else we can give the U.S. to make them happy at this moment.”
Such uncertainty appears to trouble not only the former diplomat but also many of the country’s public figures, as Panama struggles to understand statements by U.S. officials. With limited economic and military capacity, Panama finds itself caught between two superpowers – the U.S. and China.
‘There’s only one way he can take it back’
Prominent members of Panama’s civil society – including professors, former ambassadors and business leaders who don’t hesitate to openly call their country pro-American – are outraged by the comments from Trump.
Roberto Eisenmann Jr., founder of the independent newspaper La Prensa, said the situation is very troubling for Panama.
“Everything Trump said about the Panama Canal being run by the Chinese is false,” Eisenmann said. “There is not one element of truth. It’s very hard not knowing what he’s trying to do.”
The United States has been involved in Panama since 1903, when it helped Panama break away from Colombia and later built the canal. A treaty at the time gave the U.S. control over the Canal Zone, which caused tension among Panamanians who saw it as a violation of their sovereignty.
In 1964, student protests over the right to fly the Panamanian flag at a school in the Canal Zone led to riots. More than 20 Panamanian protestors and four U.S. soldiers died, increasing anti-American feelings.
Years later, U.S. President Jimmy Carter and Panamanian leader Omar Torrijos negotiated two key treaties. The first, a neutrality treaty, gave the U.S. the right to defend the canal. The second promised Panama full control of the canal by Dec. 31, 1999.
These agreements remained in place even after the U.S. invaded Panama in 1989 to remove military ruler Manuel Noriega. The invasion, called Operation Just Cause, caused civilian deaths and damage to infrastructure, leaving deep scars. Despite past tensions, Panama is still considered one of the United States’ strongest allies. The canal, now run by Panama, continues to be a vital route for global trade and U.S. economic interests.
“The relationship has had its ups and downs,” Eisenmann said. “But we were always an ally of the United States. The Trump situation is changing that. And that is very, very hard.”
In his public comments, Trump did not rule out military action if necessary. Eisenmann, however, compared it to a bluff by a poker player.
“I believe this is a bluff. When Trump says, ‘we’re gonna take it back.’ There’s only one way he can take it back,” Eisenmann said. “Large-scale invasion and occupation of the country. There’s no other way. And that’s not gonna happen.”
After the U.S. invasion in 1989, Panama replaced its military with public security forces – more akin to police, coast guard and border patrol agencies.
“Invading a demilitarized neutral country, for no good reason at all. It makes no sense,” Eisenmann said.
Michael C. Polt, a former political counselor at the U.S. Embassy in Panama, was stationed in Panama City in the years leading up to the U.S. invasion.
“There is certainly a valid concern of the U.S. to be sure that the Panama Canal as a critical international waterway remains open and accessible to all nations, including the U.S.,” Polt said. “So, in that sense, any expression of interest, concern, or any ongoing partnership and dialogue is a totally valid interaction. But I do not agree with any proposal of the United States simply saying we’re going to take the Panama Canal back.”
Former U.S. Ambassador to Panama John Feeley, who resigned in 2018 during the first Trump administration citing a difference in values, also doubts the U.S. would actually invade Panama.
“The only way Panama is going to allow Donald Trump to take back the canal physically is via invasion, and that’s off the table,” Feeley said. “He will say it’s on the table, but that’s Donald Trump.”
Feeley said Trump’s comments have stoked anger among many Panamanians, who feel that the country has been a good ally – supporting American efforts to stem the flow of migrants and drugs into the U.S.
“They are saying, ‘we’re the best cooperators in the region on counternarcotics and on undocumented migration,’” Feeley said. “They are asking, ‘why are you kicking sand in our face?’ And there is no good answer for it. Literally, Donald Trump operates in a world where the law of the jungle and the strong do what they will, the weak do what they must, and he’s doing it.”
For decades, Panama has been working closely with the U.S. to help manage migration. Under an agreement with the Biden administration, Panama cooperated in efforts to control migrant flows, including addressing movement through the Darién Gap. Now, the country is continuing these efforts as well as receiving flights carrying migrants deported from the U.S.
Panamanian officials have said they believe the Panama Canal has been operated in the best interest of the United States and other global customers. The canal remains strategically important to the United States both economically and militarily – it is a vital route for the movement of warships, weapons and goods.
The canal shortens the distance between ports on the East and West coasts of the Americas, helping to reduce transit time and fuel costs. About 72% of the ships using the canal are traveling to or from U.S. ports. It is especially valuable for time-sensitive and perishable goods, and industries that depend on just-in-time supply chains.
The United States and Panama maintain a strong trade relationship. According to the Office of the United States Trade Representative, total U.S. goods trade with Panama in 2024 was estimated at $11.3 billion. U.S. exports to Panama totaled $10.7 billion, a 3.3% decrease from 2023. U.S. imports from Panama reached $555.8 million, a 5.6% increase from the previous year. The U.S. trade surplus with Panama stood at $10.1 billion, down 3.7% from 2023.
Victoria Figge-Cederkvist, the first woman elected president of the Panamanian Association of Business Executives (APEDE), said Panama has always been a pro-U.S. country. But despite that she said “Trump is attacking friends and allies.”
Former diplomat Cisneros said he does not believe the Trump administration will use force to take control of the canal.
“I very, very seriously doubt that the U.S. will invade Panama to take control of the canal,” Cisneros said.
The two countries’ unique relationship, despite their complicated history, is now being threatened. Many Panamanians feel they are being treated like an enemy, even though they have long considered themselves friends of the United States.
José Chen Barría, former immigration director and a member of the Panamanian Friendship Association With China, believes the U.S. president is using threats to gain control over business activities around the canal.
“He will never take back the canal,” Barría said. “He will take back some activities around the canal, which is different.”
The China factor
Barría, also a professor at the University of Panama, is a member of the small but vibrant ethnic Chinese community in Panama — about 4% of the country’s 4.5 million people — which serves as an important diplomatic bridge with China.
In June 2017, then-President Juan Carlos Varela severed Panama’s long-standing diplomatic ties with Taiwan and established diplomatic relations with China. Eisenmann said this came as a surprise to Washington.
“If Varela had consulted the United States, we would not have had the relation with China,” he said.
In 2018, Panama signed a memorandum of understanding with China on the Belt and Road Initiative (BRI), becoming the first Latin American country to do so. One proposed project under the BRI included a railroad from Panama City to Costa Rica.
That same year, U.S. Ambassador Feeley resigned, citing disagreements with Trump. It took the U.S. four and a half years to appoint a new ambassador. During that time, China moved quickly. It sent a Spanish-speaking diplomat, Wei Qiang, to Panama. He traveled throughout the country, engaged with communities and helped strengthen relations.
Varela visited China in 2017. A year later, Jinping made a state visit to Panama. Between June 2017 and December 2018, the two countries signed 47 agreements. China later described the establishment of diplomatic ties with Panama as one of its most important diplomatic achievements that year.
In March 2024, China appointed Xu Xueyuan as ambassador to Panama. She served as deputy chief of mission at the Chinese Embassy in Washington, D.C., from 2018 to 2024, and is considered an expert in U.S. affairs. In a recent article published in Panamanian media, Xu wrote, “Walking with China is walking with opportunities.” She highlighted the growing economic relationship between the two countries.
China is now the second-largest user of the Panama Canal, after the United States, and is also Panama’s main economic partner. Trade between the two nations grew from $6.38 billion in 2016 to $12.84 billion in 2024. China’s direct investment in Panama increased from $269 million in 2016 to $1.4 billion in 2024.
During the same period, the U.S. lacked an ambassador in Panama.
“Those four years without an American ambassador were very bad,” Barría said. “When the Americans realized that the Chinese were here, we were four years without an ambassador. Can you imagine that?”
Eisenmann echoed that frustration.
“That was a stupid move,” he said. “For more than four years, there was nobody there.”
Feeley called it a lost opportunity for effective commercial diplomacy.
Figge-Cederkvist said Panama has long had trade ties with China, even before formal diplomatic relations were established.
“Even after not renewing the BRI, that relationship will go forward,” she said. “We are in the right place on the continent to do good business with every country. We bring goods from Europe and redistribute them all over Latin America. We’ve seen beautifully made cars from China, and they compete with U.S. cars in quality and price. But I think Panamanians do not really discriminate as to who they do business with.”
Despite growing trade and economic ties, Panama’s relationship with China has cooled in recent years.
Under former President Laurentino Cortizo (2019–2024), engagement with China slowed down. A proposed free trade agreement had been under discussion, but negotiations stalled after Cortizo took office. Major infrastructure plans under the BRI also failed to move forward.
That shift paved the way for current President José Raúl Mulino to formally step back from the BRI.
“There wasn’t much going on with China under President Cortizo, and now we are in a deep freeze with the Chinese,” Cisneros said. “We are not moving.”
Eisenmann said Panama’s withdrawal from the BRI came in part because there had not been significant progress under the deal. He said it made it easier for the current government to end the agreement to ease tensions with the U.S.
Still, Trump has repeatedly claimed that China controls the canal. In response, the Chinese Foreign Ministry said in a statement posted on X, formerly known as Twitter, that:
“China has never participated in the administration and operation of the Panama Canal, nor has it interfered in its affairs. The alleged ‘China’s control of the Panama Canal’ is a pure lie.”
Cronkite News contacted the Chinese Embassy in Panama with questions about Panama’s decision not to renew its BRI commitment, the sale of CK Hutchison’s port assets to BlackRock, and U.S. claims of Chinese influence. The embassy did not respond.
A push for diversification
As global tensions between the United States and China continue to grow, Panama is trying to find its own path forward. Rather than taking sides in a rivalry between two superpowers, many in Panama believe the country should focus on building relationships with a wider range of partners.
In 2025, Panama began its two-year term as a non-permanent member of the United Nations Security Council. The role gives Panama more influence on the world stage and could help strengthen its diplomatic ties with countries around the globe.
“The logical move for Panama is to diversify,” Eisenmann said. “Which actually would mean that the relationship with China will be more important. Also, Europe and other countries could fill in the blanks instead of being 100% dependent on the United States.”
Figge-Cederkvist said the country is open to investment from anywhere in the world.
“We’re really not going to care whether it’s Chinese or European or African or American or Canadian that comes to invest with us, as long as they comply with what is requested,” she said. “Panama is open for business without any restrictions from anywhere.”
Feeley said Panama and other countries in the region often feel caught in the middle.
“I think Panama, like most countries in the region, feels like a child of divorcing parents,” he said. “Panama would like for China and the United States to stop making them choose. The Global South doesn’t want to be forced to choose. They want to be respected as sovereign nations.”
Polt, the former U.S. diplomat, agrees that the U.S. should not pressure Panama to take sides.
“If I were the American president or the American secretary of state, I would not go to Panama or to any of our partners and say, ‘choose us or China, you can’t have both.’ That should not be our policy,” he said. “Our policy should be, we are your friends. We want to work with you to our mutual benefit. You are, as an independent free nation, to choose any additional relationships that you wish to have.”
