US President-elect Donald Trump wants to take control of the Panama Canal. He repeated this several times, even threatening to use “military force” to seize the strategic passage connecting the Atlantic and Pacific Oceans. Trump falsely claimed at the Mar-a-Lago press conference that the canal was now in Chinese hands: “We gave it to Panama, but now it belongs to the Chinese,” he had also complained in previous weeks. The fact that American ships are being charged “exorbitant amounts” to cross the canal is a reference to the toll to which all ships are subject. In response, Panamanian President José Raul Mulino was not afraid and rejected the provocation; He denied lowering tolls and China’s influence on his government.
Chinese company operating Panama’s two main ports
The United States has a complicated history with Panama. And now this is being used by the future 47th American president to hide his fears of Chinese competition for alternative infrastructure to maritime transit.
History of the channel
The 81.1 km long canal was built by the Americans between 1907 and 1914, after then-President Theodore Roosevelt wanted to restart the project to create a passage between the two oceans in the 19th century. At the time, the region was controlled by Colombia, but a US-backed rebellion led to the establishment of the Republic of Panama in 1903. That same year, the United States and the newly formed Central American country signed a treaty that gave the United States control of the Republic of Panama. Approximately 16 kilometer strip of land for the construction of the canal in exchange for financial repayment. The study was completed in 1914 and it is estimated that approximately 5,600 people died during the study.
The relationship between the United States and Panama began to collapse over disagreements over the control and treatment of Panamanian workers until the two countries severed diplomatic relations on January 9, 1964. In 1977, it was Jimmy Carter who reached an agreement that restored full control of Panama in 1999.
Since 2017, the People’s Republic has begun a series of commercial negotiations with Panama for the control of two of the five ports adjacent to the Canal within the scope of Panama’s investment and infrastructure projects. Belt and Road Initiative. The Central American country became the first country in Latin America to join the Chinese infrastructure project, and the region’s trade with Beijing has exploded in recent years, rising from $14 billion in 2000 to $500 billion in 2022.
Now let’s turn to control of the Panama Canal. Hutchison Ports Holdings, through its interest in Panama Ports Company (PPC), manages the Panamanian port of Balboa on the Pacific coast of the Republic of Panama and the Panamanian port of Cristobal facing the Atlantic. Hutchison Ports Holdings is therefore the largest port operator in the region. In 2021, it signed the renewal of the 25-year concession with the Panama Maritime Authority, Panama’s authority for the management of port infrastructure. The management of strategic transit ports, through which approximately 2.5 percent of the world’s maritime trade volume passes, but above all 46 percent of maritime commercial traffic between North Asia and the east coast of the United States, is therefore the giant of the industry.
But let’s see what role this giant plays. Hutchison Port Holdings is the port infrastructure division of CK Hutchison, a multinational conglomerate registered in the Cayman Islands and headquartered in Hong Kong, resulting from the 2015 merger of Cheung Kong Holdings Limited with its main subsidiary, Hutchison Whampoa Limited. The sectors in which CK Hutchison has an interest are many and range from telecommunications (it fully controls the Italian telephone company Wind 3) to energy and infrastructure.
From the port city of Hong Kong, Hutchison Ports began controlling 53 ports covering 24 countries in Asia, the Middle East, Africa, Europe, the Americas and the Indo-Pacific. Officially, it is a private company, but the line between private and public company is quite blurry in China. This is because those at the top of the company have close contacts with the Communist Party. Victor Li, the current CEO of parent company CK Hutchison Holdings Limited, is a member of the Chinese People’s Political Consultative Conference, an advisory body to the central government. He has also been an ardent supporter of Hong Kong’s new national security law, which, among other things, condemns anyone who even talks about Hong Kong’s separation from China. However – it is worth noting – it is not possible to determine from the available information whether there were Communist Party cells at Hutchison Port Holdings.
Panama, China and Taiwan: Trade and economic triangle
But it was still enough for some members of the US Congress, including Congressman Raja Krishnamoorthi, to express fear of Chinese interference at a hearing on China’s global development strategy and the company’s ties to Beijing; This could lead to delays in American civil and military operations. Shipments in case of conflict with Taiwan. The rebellious island that Beijing calls Taipei is unfortunately at the center of this economic and diplomatic game. The Panamanian government severed diplomatic relations with Taiwan in 2017 in order to establish diplomatic relations with China. The decision surprised the United States and signaled Beijing’s growing influence in Latin America, which is home to seven of the 11 countries (up to 12 with the Vatican State) that still recognize Taiwan as a sovereign state.
Now locked in conflict with Panamanian leader Mulino (who has described Panama as a “strategic partner” of the White House), Trump is dusting off history for control over the canal. The infrastructure was built by the United States more than a century ago, but was returned to the Central American country in 1999 under an agreement signed by Democratic President Jimmy Carter in the 1970s. In practice, it is almost impossible for the United States to regain control of the Canal. And neither the small Central American state nor the Asian giant will allow this.
Source: Today IT
Karen Clayton is a seasoned journalist and author at The Nation Update, with a focus on world news and current events. She has a background in international relations, which gives her a deep understanding of the political, economic and social factors that shape the global landscape. She writes about a wide range of topics, including conflicts, political upheavals, and economic trends, as well as humanitarian crisis and human rights issues.
