Trump seeks to reclaim Panama Canal amid U.S. military return fears

Trump’s push to regain control of the Panama Canal revives concerns of U.S. militarization and sparks political tension in Panama.

Two men stand by the Miraflores Locks along the Panama Canal in Panama City on April 8, 2025. Photo by Martin Bernetti/AFP

By Anna Fadiah and Hayu Andini

When U.S. President Donald Trump announced plans to reclaim control of the Panama Canal, the geopolitical waves rippled far beyond Washington. The move, driven by fears of growing Chinese influence in Latin America, has sparked intense debate in Panama, where memories of past U.S. occupations still haunt national consciousness. Trump seeks to reclaim the Panama Canal as part of his broader foreign policy strategy aimed at confronting Beijing, and the latest agreement signed by U.S. Defense Secretary Pete Hegseth has only amplified tensions.

The new military agreement, signed last week with the administration of Panamanian President Jose Raul Mulino, allows the U.S. to deploy troops to areas adjacent to the Panama Canal. Though framed as a cooperative arrangement for training and joint security operations, the deal is being met with sharp criticism from political observers and segments of the Panamanian public.

A controversial return of U.S. forces

Under the terms of the agreement, the United States can now station an unspecified number of troops at three locations it previously occupied during the period it controlled the canal zone. These deployments will be rotational, resembling the kind of military presence the U.S. maintains in countries like Australia.

Supporters of the agreement argue that it doesn’t establish permanent U.S. bases and that it represents a necessary evolution of strategic cooperation. But critics see it as a breach of Panama’s sovereignty and a violation of the 1977 Torrijos–Carter Treaties, which guaranteed Panama’s exclusive control over its territory and military forces following the canal’s full transfer in 1999.

“This is a flagrant violation of our constitution,” said Euclides Tapia, a professor of international relations in Panama. “It contradicts the very treaties that were meant to protect our sovereignty and canal neutrality.” Tapia’s concerns are echoed by others who fear this agreement reopens the door to U.S. militarization and a return to a colonial-style relationship.

Legal and political pushback in Panama

While the Mulino administration insists that the land and facilities remain under Panamanian control and that operations will be “joint” in nature, the political rhetoric within the country is heating up. Critics like former presidential candidate Ricardo Lombana accuse the government of hiding the true nature of the agreement, calling it “camouflaged surrender.” Julio Yao, who once advised the government during the original canal negotiations, claims the United States is "recolonizing and reoccupying" Panama.

Benjamin Gedan, a former director for South America at the U.S. National Security Council and now a professor at Johns Hopkins University, understands why Panamanians remain wary. “There’s still trauma from the occupation and especially the 1989 invasion. Panamanians are not willing to relive that,” he said.

The China factor and Trump’s strategic vision

The entire move, according to analysts, is deeply tied to Trump’s broader foreign policy goals. Trump seeks to reclaim Panama Canal—is more than a diplomatic initiative; it is a symbol of his administration's aggressive posture against China.

The United States views Chinese commercial control of ports at both ends of the canal as a strategic threat. Trump’s return to the Panama issue is part of what experts describe as a “doctrine of peace through strength,” in which the U.S. reasserts its dominance in key global chokepoints.

“Trump wants to ensure the U.S. could deny Beijing access to the canal during a conflict, especially over Taiwan,” said Will Freeman, a fellow at the Council on Foreign Relations. “This is also about signaling power and deterring aggression.”

Natasha Lindstaedt, an international affairs expert at the University of Essex, agrees. She views the developments in Panama as part of a broader U.S. effort to limit Chinese influence across Latin America. “It’s no coincidence this comes at a time when the U.S. is reassessing global alliances and strategic assets,” she said.

A trade-off for Panama’s leadership?

For President Mulino, the agreement appears to be a calculated risk. According to Freeman, the move may serve as a trade-off to reduce direct confrontation with the Trump administration, possibly softening other demands or conditions in diplomatic relations. However, it could also come at a high cost.

“The risk is that Trump makes Mulino look weak, like a puppet,” said Freeman. “That could turn him into a lame duck president, limiting his ability to govern.”

Such a scenario would not only affect domestic politics in Panama but also destabilize a region already strained by economic inequality, migration, and external pressures from larger powers.

Memories of past U.S. interventions

Panama’s sensitivity to the presence of U.S. forces is not unfounded. For decades, the United States maintained a significant military footprint in the canal zone, leading to social and political tensions. The 1989 invasion to oust military strongman Manuel Noriega remains a dark chapter in the country’s modern history.

Now, as Trump seeks to reclaim the Panama Canal and deploy U.S. forces under a new banner, Panamanians are once again debating the price of partnership with Washington. Is this a strategic necessity in an age of global competition, or the beginning of a new era of foreign interference?

A segment of the population is open to pragmatic cooperation, especially if it means improving security and infrastructure around one of the world’s most vital shipping routes. Others, however, see it as the beginning of a slippery slope toward dependency and loss of autonomy.

A balancing act between global powers

The situation puts Panama in an increasingly delicate position. With China investing heavily in infrastructure projects across Latin America—including ports, railways, and telecom networks—the United States is ramping up its efforts to maintain influence in the hemisphere. Panama’s central geographic location and the canal’s strategic importance make it a focal point in this tug-of-war.

For now, the agreement stands. But its political cost is already being debated on the streets of Panama City and in international forums. As Trump seeks to reclaim the Panama Canal, the move will be closely watched not just in Beijing and Washington, but across Latin America and the global maritime industry.

Panama’s next steps could redefine how smaller nations navigate great power politics in the 21st century—and whether the ghosts of past occupations will again shape the future of a proud and independent nation.