The Silent Chokehold of the Panama Canal: How China Encircled America’s Most Vital Trade Route Without Firing a Shot

For America, the stakes are higher than ever—not just in reclaiming the lifeline that fuels global commerce, but in reaffirming its role as the unquestioned guardian of the Western Hemisphere.

On the morning of August 15, 1914, the first ship passed through the Panama Canal, a man-made artery carved through the dense, fever-ridden jungles of Central America. It was an engineering marvel, a monument to ambition, and the final realization of a vision that had been dreamt of since the Spanish conquest. Built with American steel, funded by American capital, and secured through an audacious act of statecraft that could rival any spy thriller, the canal was more than a passage—it was the key to America’s rise as a global superpower.

But today, that key is in a precarious state and no longer in American hands. In 1999, under the terms of the Torrijos-Carter Treaty, the United States handed control of the canal to Panama. Since then, Chinese interest have gained a powerful foothold, financing infrastructure and wielding influence over the vital trade route that links the Atlantic and Pacific Oceans. Now, with Donald Trump back in the White House, the time has come for America to reclaim what was once the beating heart of its industrial and military dominance. This is not just a question of nostalgia or empire—it is a modern day matter of national survival.

The Men Who Built the Impossible

To understand the canal’s significance, we must first understand the men who willed it into existence. The first attempt to build the canal belonged to the French, under the ambitious but ill-fated leadership of Ferdinand de Lesseps, the man behind the Suez Canal. But where the Suez was a placid cut through desert sand, the Isthmus of Panama was a different beast—a labyrinth of mountains, swamps, and tropical disease.

The French effort collapsed in the 1880s, defeated by yellow fever, financial ruin, and a gross underestimation of the task at hand.

It would take an American to finish what the French could not. Enter Theodore Roosevelt, a president who saw the canal as not just an engineering project, but as a declaration of American supremacy. In a maneuver worthy of a James Bond spy film, Roosevelt and his administration orchestrated a covert and high-stakes campaign to support Panamanian independence from Colombia.

The stage was set in 1903 when the Colombian Senate refused to ratify the Hay-Herrán Treaty, which would have granted the U.S. the right to build and control the canal. Roosevelt, unwilling to let his vision be thwarted by bureaucratic delay, turned to Philippe Bunau-Varilla, a French engineer, diplomat, and businessman with a complicated past. Bunau-Varilla had been deeply involved in the failed French canal effort, but instead of retreating, he became obsessed with ensuring the project's success—even if it meant shifting control to the Americans. A charismatic and persuasive figure, he leveraged his connections in Washington to push for U.S. intervention in Panama. Fluent in both finance and geopolitics, he saw an independent Panama as the ultimate solution and personally drafted much of the treaty that would later cede control of the canal zone to the United States.

As tensions reached a boiling point, U.S. warships, including the USS Nashville, quietly moved into position off the Panamanian coast. On November 3, 1903, the rebellion ignited. With the backing of local revolutionaries and the silent but unmistakable presence of American naval firepower, Panama declared its independence from Colombia. When Colombian forces attempted to suppress the uprising, they found themselves blocked—both by armed Panamanian nationalists and the strategic positioning of U.S. warships that prevented reinforcements from landing.

In a dazzlingly swift maneuver, Bunau-Varilla, without ever setting foot in Panama during the rebellion, secured recognition of the new Panamanian government from the United States. Within days, the newly formed Republic of Panama signed the Hay-Bunau-Varilla Treaty, granting the U.S. complete control over the Canal Zone, an expanse of land stretching approximately 553 square miles (1,432 square kilometers), running for 50 miles (80 kilometers) across the Isthmus of Panama and extending roughly five miles on either side of the canal itself.

The deal was sealed; America would build the canal—and own it. Roosevelt would later claim that he "took the Canal Zone and let Congress debate it later."

The Financing

The financing of the Panama Canal was a herculean effort, reflecting both the ambition and the geopolitical stakes of the project. The final cost of the canal, completed in 1914, amounted to approximately $375 million—making it the most expensive construction project in U.S. history at the time. The bulk of the funding came directly from the U.S. government, which took over from the failed French attempt led by Ferdinand de Lesseps. The pivotal financier behind the U.S. acquisition was J.P. Morgan & Co., which acted as the fiscal agent in purchasing the canal assets from the French Compagnie Nouvelle du Canal de Panama for $40 million in 1904. Congress approved the funding through the Spooner Act of 1902, and the Roosevelt administration secured an additional $10 million payment to Colombia’s breakaway province, Panama, to establish the U.S. Canal Zone. Unlike modern megaprojects, which rely on consortia of banks, investors, and bond markets, the canal was almost entirely a U.S. federal undertaking, reflecting its status as a strategic and military asset rather than a purely commercial venture. However, Wall Street bankers like J.P. Morgan, along with political figures such as Teddy Roosevelt and Secretary of War William Howard Taft, were instrumental in arranging and justifying the financial and diplomatic maneuvers that made the canal a reality.

The Unveiling

The opening of the Panama Canal on August 15, 1914, was a moment of profound historical and geopolitical significance, yet its grand unveiling was overshadowed by the outbreak of World War I just weeks prior. Unlike the sweeping parades and grand ceremonies that had been envisioned, the canal’s first official transit—by the cargo ship SS Ancon—was a relatively subdued affair, attended by a modest gathering of U.S. and Panamanian officials. Still, among industrialists, maritime powers, and global trade networks, the canal was received with awe and admiration, heralded as one of the greatest engineering feats of the modern era. Newspapers across the world proclaimed it a marvel of human ingenuity, comparing it to the Great Wall of China and the Suez Canal, while shipping magnates and economic strategists recognized its potential to permanently reshape global commerce. Though the war dampened immediate fanfare, by the 1920s, as global trade rebounded, the canal’s revolutionary impact on maritime logistics, military strategy, and economic expansion became undeniable—cementing it as a defining symbol of American engineering prowess and industrial ambition.

The next few decades, what had once been a symbol of U.S. dominance in the Western Hemisphere evolved into a flashpoint for sovereignty disputes, Cold War geopolitics, and shifting tides in global leadership—culminating in the high-stakes saga of President Jimmy Carter and the fight over the Panama Canal’s future.

The Jimmy Carter Era and the Handing Over of the Panama Canal

By the mid-20th century, tensions over American control of the Panama Canal had reached a breaking point. While the canal had long been a symbol of American engineering and dominance, it was also a source of deep resentment among Panamanians, who saw its continued foreign control as a relic of colonialism. Nationalist sentiments in Panama were growing, and tensions between Panamanians and Americans escalated, particularly under General Omar Torrijos, who took power in 1968 after a military coup. Torrijos was the fierce leader of the Panama nationalist movement and viewed the U.S. control of the canal as an unacceptable infringement on Panama’s independence.

Tensions Under Carter: The Push for a Treaty

By the time Jimmy Carter became president in 1977, U.S.-Panama relations were at a breaking point. The U.S. faced three main pressures that made continuing control of the canal untenable:

1. Panamanian Nationalism & Protests – Anti-American protests had erupted in Panama for years, with some incidents turning violent. In 1964, U.S. troops killed over 20 Panamanians in the so-called Martyrs’ Day riots, worsening tensions. General Torrijos warned that Panama was ready to take military action to reclaim the canal if the U.S. refused to negotiate.

1. Global Reputation & Decolonization – The U.S. was increasingly being viewed as a colonial power in the post-World War II era, especially as Latin America and the Non-Aligned Movement supported Panama’s claims. Holding onto the canal indefinitely risked alienating allies and reinforcing Cold War-era critiques of American imperialism.
2. Security Concerns & Instability – The possibility of guerrilla attacks or sabotage against the canal posed a serious risk to U.S. shipping and military operations. The fear was that, if a conflict broke out, the canal could be damaged or rendered inoperable.

Recognizing the need for a peaceful resolution, Carter entered negotiations with General Torrijos, leading to the signing of the Panama Canal Treaties on September 7, 1977.

These treaties laid the groundwork for the gradual transfer of control over the canal from the United States to Panama. Despite fierce opposition from many American lawmakers, who feared the loss of a vital strategic asset, Carter pushed the treaties through Congress, arguing that a peaceful handover would secure better long-term relations with Latin America.

The transition occurred in stages, culminating on December 31, 1999, when the Panama Canal Authority officially assumed full control. Since then, Panama has managed and expanded the canal, though questions remain about the broader geopolitical consequences of America relinquishing its grip on such a crucial maritime corridor.

A Modern-Day Struggle for Control

Today, the Panama Canal has once again become a flashpoint in global geopolitics, caught between American concerns over national security and China's strategic economic ambitions. President Donald Trump has reignited the debate over U.S. control of the canal, claiming that China has effectively taken over operations and warning that America must act decisively.

“We didn’t give it to China,” Trump said during his inaugural address. “We gave it to Panama, and we’re taking it back.”

Before considering what measures might be taken, it is critical to understand what Trump means by “We didn’t give it to China”. On the surface, there is no flat out Chinese state or CCP intervention in the Canal directly per say, but when you dig a layer deeper, what you see is a complex, ever rising and troubling influence of Chinese interests being wielded across the Panama Canal.

China’s Silent, but Rising Stranglehold on the Panama Canal - The Shadow of CK Hutchison Holdings

It begins, as many stories of power do, in the murky corridors of influence—far from the clanking of shipyards and the roar of container vessels that define the Panama Canal. The key player is a name few Americans recognize: CK Hutchison Holdings, a Hong Kong-based conglomerate with a vast and growing grip on the arteries of global trade today directly owing over 50 shipping ports around the world.

Once a British-controlled firm under Sir Douglas Clague, CK Hutchison evolved into something else entirely when it was absorbed into the business empire of Li Ka-shing, the legendary Chinese billionaire whose fortune stretches from the skylines of Hong Kong to the energy fields of Canada. Li—dubbed “Superman” for his uncanny business instincts—transformed the company into the world’s largest network of container ports, threading his influence through some of the most geopolitically sensitive shipping lanes on Earth.

His empire extended across industries: the Rotterdam container terminals, Hong Kong’s maritime hubs, a sprawling Canadian oil giant (Husky Energy), and real estate holdings that include Oriental Plaza, the most significant development in Beijing since the Ming dynasty.

And yet, CK Hutchison is not merely an empire of concrete and steel—it is an empire of access. Under the watchful eye of Li’s son, Victor Li, the company has ventured deep into venture capital, making early, calculated bets on companies like Facebook, Spotify, and Impossible Foods through its investment arm, Horizons Ventures. But for all its forward-facing innovation, it is the company's control over the back channels of global trade that raises alarm in the West.

Nowhere is this more apparent than Panama.

China’s Silent Siege of the Panama Canal - The Balboa and Cristóbal Ports

Beneath the shimmering waters of the world’s most strategic chokepoint, an invisible game of power unfolds. The Panama Canal—an artery through which 4% of global trade flows, a conduit for 70% of U.S.-bound goods—has become an unlikely stage for geopolitical maneuvering. At the heart of this silent battle stands Li’s Hutchison Ports, with deep-rooted ties to Beijing, controlling both the Balboa and Cristóbal ports—the twin sentinels at the Pacific and Atlantic ends of the canal.

For decades, these facilities have hummed with the rhythm of international commerce, their blue cranes lifting millions of containers destined for American shores. But in the shadows of this logistical ballet lurks a mounting concern—one that has prompted the highest echelons of Washington and now Trump to sound the alarm.

A Closer Look

Hutchison controls ports on both sides of the Panama Canal holding about 40% of its port market share. While the U.S. still dominates shipping volumes, China's rapid adoption of port automation and global shipping influence especially considering Hutchinson’s influence on nearly 50 others ports make this dynamic an increasing concern.

The punchline? The canal has become an increasingly Chinese-influenced waterway, not by warships, but by boardroom maneuvers and quiet economic encirclement. CK Hutchison's deep-rooted ties to Chinese state-owned enterprises, its investments in Belt and Road Initiative projects, and its alignment—whether formal or informal—with Beijing’s strategic ambitions have made the firm a geopolitical flashpoint.

In Washington, intelligence analysts and military strategists whisper concerns about what it means for a nominally private company with such entanglements to control infrastructure so vital to U.S. military logistics and global commerce.

One hand, Panama officials and former government leaders were quick to cast this off. Officially, CK Hutchison is just another multinational firm navigating the tides of international trade. But in the shadows, its presence in Panama is increasingly seen as part of a grander design—one in which China does not need to seize power by force when it can simply own the pathways through which power flows.

Secretary of State, Marco Rubio sheds light on this best:

“If these companies control both ends of that canal in a time of conflict, and the Chinese tell them, ‘Shut it down and don’t let the U.S. go through there,’ we’ve got a big, big problem,” Secretary of State Marco Rubio said last week during his Senate confirmation hearing, “a big economic problem and a big national security and defense problem.”

At the canal’s edge, as another container ship passes through the locks under the flag of global commerce, the question lingers: Who truly controls the gateway between the oceans and who will decide its future?

A Future in the Balance

As tensions rise, U.S. lawmakers have begun exploring legislative measures to limit Chinese investments in Panama’s infrastructure. Panamanian authorities, responding to mounting pressure, have launched an audit of the Hong Kong-linked operator of two Panama Canal ports following U.S. President Donald Trump's vocal concerns about Chinese influence over the critical interoceanic waterway.

Auditors arrived at the Panama Ports Company on Monday, "to begin an exhaustive audit aimed at ensuring the efficient and transparent use of public resources," the comptroller's office announced on social media. The Pentagon has also conducted strategic war games assessing scenarios in which the canal becomes a geopolitical chokepoint. With China’s economic foothold in Panama growing and Trump pushing for a dramatic policy shift, the future of the canal is more uncertain than it has been in decades.

Panama Canal - An American Imperative

The battle for control of the Panama Canal is no longer fought with shovels and dynamite, but with strategy, influence, and the quiet power of economic entanglement. The world watches with bated breath, caught between history and an uncertain future. For America, the stakes are higher than ever—not just in reclaiming the lifeline that fuels global commerce, but in reaffirming its role as the unquestioned guardian of the Western Hemisphere.

The ghosts of Roosevelt and Carter loom over this fight. One built it, the other gave it away. And now, under a second Trump Administration, a new era demands a bold reckoning. With the balance of power shifting, the question is no longer if America will act—but when, and how decisively. The canal stands as a test, a proving ground for the next great chapter in global power struggles. And as the tides surge through its locks, the time for mere observation is over. The time for America to reclaim its place at the helm has arrived.