Explainer | Why does Trump want the Panama Canal?

Most cargo passing through the canal originates from or is destined for the US, which completed construction of it in the early 20th century

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Tourists look at a cargo ship waiting to enter the Panama Canal on Saturday. Photo: AFP

Published: 3:41pm, 29 Jan 2025

Newly inaugurated US President Donald Trump is pushing to “take back” the Panama Canal, the world’s second busiest interoceanic waterway, spurring concerns that the United States could invade the Central American nation.

Trump argues that Panama has broken a pledge of neutrality made when the US transferred the canal to Panama in 1999, falsely claiming that China is operating it.

The canal is operated by the Panama Canal Authority, an autonomous agency overseen by the Panamanian government.

A Panamanian flag is pictured in front of cargo ships waiting to enter the Panama Canal. Photo: AFP

What is the Panama Canal?

The Panama Canal is an 82-km (51-mile) artificial waterway that connects the Pacific and Atlantic Oceans, and key to global trade flows. It saves ships thousands of miles and weeks of travel. Before it was built, ships had to make the long journey around the stormy tip of South America in order to travel by sea between the two oceans.

Over two-thirds of all cargo passing through the canal today originates from or is destined for the US.

The US completed construction of the canal in the early 20th century, a project begun by France that claimed the lives of more than 25,000 workers.

Following pressure from anti-colonial movements, the US signed treaties in 1977 granting Panama control and sovereignty over the canal zone and guaranteeing its permanent neutrality. These took effect in 1999.