While US President Donald Trump has claimed China “operates” the Panama Canal – an allegation that has stirred controversy, as the president has proposed putting the canal back under US control – the reality is far more complicated than the highly charged rhetoric would suggest.
Why does the Panama Canal matter?
The Panama Canal is one of the most critical waterways on the planet, providing a short cut between the Atlantic and Pacific Oceans. Every year, about 5 per cent of global trade is estimated to flow through the canal’s locks.
For China, it serves as an essential link to Latin America, shortening shipment time and easing the movement of goods to and from markets in the Western Hemisphere.
Between October 2023 and September 2024, the Panama Canal Authority generated US$3.38 billion in revenue, with China accounting for 21.4 per cent of the cargo volume transiting the route. This made it the country with the second-highest proportion of trade moving through the waterway.
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