Panama Canal Trump Conspiracy

Overview

In December 2024, less than a month after winning the presidential election, Donald Trump floated an idea that sounded like it had been teleported from 1903: the United States should take back the Panama Canal. Not buy it. Not renegotiate fees. Take it back. When pressed on whether he’d rule out military force to accomplish this, Trump declined to do so.

The statement landed like a grenade in Latin American diplomatic circles, drew comparisons to Theodore Roosevelt’s gunboat diplomacy, and ignited a firestorm of competing conspiracy theories — some from the right, some from the left, and some that defy easy categorization. Was China secretly controlling one of the world’s most critical shipping chokepoints through a shadowy corporate proxy? Was this just imperial nostalgia dressed up in national security language? Was a subsequent billion-dollar port sale to a BlackRock-led consortium proof that Trump’s threats had worked — that the real play had been economic coercion all along?

The truth, as is often the case with conspiracy theories built on real geopolitical fault lines, involves layers of legitimate concern wrapped in significant distortion. The Panama Canal is not controlled by China. But a Hong Kong-based conglomerate did operate ports at both entrances to the canal. Trump’s rhetoric wasn’t random. But the solutions he proposed had more in common with 19th-century colonialism than 21st-century statecraft. And the BlackRock deal? That part is genuinely strange.

Welcome to the Panama Canal, 2025 edition — where the conspiracy theories are more interesting than they have any right to be, and the facts are stranger than the theories suggest.

The Canal: A Quick History of American Control and Its End

You can’t understand the conspiracy theories without understanding the history, and the history is basically a case study in how empires are built, maintained, and — occasionally — surrendered.

The Panama Canal exists because the United States wanted it to exist, and because the United States was willing to do whatever was necessary to make it happen. In 1903, when the Colombian government balked at American terms for a canal-building treaty, President Theodore Roosevelt supported a Panamanian independence movement — which is a diplomatic way of saying he helped engineer a revolution. Panama declared independence on November 3, 1903. The United States recognized the new nation on November 6. By November 18, the US had signed the Hay-Bunau-Varilla Treaty with Panama’s new government, securing rights to a 10-mile-wide strip of land across the isthmus — the Canal Zone — “in perpetuity.”

“In perpetuity” lasted 96 years.

The canal itself was a staggering feat of engineering and human cost. Construction ran from 1904 to 1914, employing tens of thousands of workers — mostly from the Caribbean — and killing an estimated 5,609 of them, primarily from disease. Malaria and yellow fever did what the jungle terrain and explosive excavation couldn’t: they made the American Canal Zone into a graveyard long before it became a shipping lane.

For the next six decades, the Canal Zone operated as a de facto American colony in the middle of a sovereign nation. US military bases dotted the landscape. American citizens lived in manicured suburbs with their own schools, courts, and swimming pools while Panamanians were effectively barred from the Zone. It was Jim Crow in the tropics — complete with separate pay scales, separate facilities, and the unmistakable understanding that the Canal Zone existed for America’s benefit, and Panama existed to make that possible.

The arrangement bred resentment that boiled over periodically. In January 1964, Panamanian students who attempted to raise their national flag alongside the American flag in the Canal Zone were met with violence by Canal Zone police and residents. Twenty-one Panamanians and four US soldiers died in the ensuing riots — the Martyrs’ Day uprising. It was the beginning of the end.

The Carter Treaties

By the late 1970s, the geopolitical calculus had shifted. The United States was fighting a Cold War in which its control of the Canal Zone had become a propaganda gift to the Soviet Union and leftist movements throughout Latin America. Panamanian dictator Omar Torrijos was making increasingly credible threats about sabotage. And President Jimmy Carter — who believed the treaties were both morally right and strategically necessary — negotiated the Torrijos-Carter Treaties, signed on September 7, 1977.

The treaties established a timeline: joint US-Panamanian operation through December 31, 1999, at which point full control of the canal would transfer to Panama. The US retained the right to defend the canal’s neutrality but gave up sovereignty over the Canal Zone.

The American right never forgave Carter for this. Ronald Reagan built part of his 1980 campaign around opposing the treaties. Conservative commentators called it a surrender. “We bought it, we paid for it, it’s ours, and we’re going to keep it,” Reagan famously declared — though he softened his position once in office and never attempted to revoke the treaties.

On December 31, 1999, at noon, the last American flag was lowered over the Canal Zone. Full control passed to the Panama Canal Authority (ACP), an autonomous agency of the Panamanian government. The handover was peaceful, orderly, and — to those who’d warned of catastrophe — anticlimactic. The canal continued to function. Ships continued to transit. Tolls continued to be collected.

For a quarter century, the canal operated under Panamanian control without serious incident or American complaint. Then Donald Trump happened.

Trump’s Declaration: “Take It Back”

On December 21, 2024, during a speech at a Turning Point USA event in Phoenix, Trump declared that the Panama Canal had been “foolishly given” to Panama by Jimmy Carter and that the United States was being “ripped off” by exorbitant transit fees. He demanded that fees be reduced and warned that if Panama did not comply, the US would “demand that the Panama Canal be returned to the United States of America, in full, quickly, and without question.”

The following day, he escalated on Truth Social: “If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, and without question.”

On December 23, when a reporter asked Trump whether he could assure the world he would not use military or economic force to take the canal, he responded: “No, I can’t assure you on either of those two. But it might be that you’ll have to do something about it.”

This was not, in other words, a throwaway line. Over the span of three days, the incoming president of the United States made an explicit territorial claim on sovereign Panamanian infrastructure, declined to rule out military force, and did so while simultaneously floating the purchase of Greenland from Denmark and making veiled threats about absorbing Canada. The trifecta led observers to wonder whether Trump was pursuing a coherent geopolitical strategy, engaging in negotiating theater, or simply indulging an appetite for territorial expansion that would’ve made William McKinley blush.

The Fees Question

Trump’s claim about “exorbitant” fees deserves scrutiny, because it’s the most testable of his assertions.

Panama Canal tolls are not set arbitrarily. They’re determined by the Panama Canal Authority based on vessel type, size, cargo, and draft. A standard Panamax container ship pays roughly $150,000-$450,000 per transit, depending on specifications. A large Neopanamax vessel — the canal was expanded in 2016 specifically to accommodate these behemoths — can pay upward of $800,000 or more.

These are significant fees. They are also roughly in line with the economic value the canal provides. The alternative to transiting the Panama Canal is sailing around Cape Horn — adding approximately 8,000 nautical miles and two weeks to a voyage between the US East Coast and Asia. For a container ship burning 150-200 tons of fuel per day, the additional fuel cost alone can exceed $1 million. The canal is expensive, but it’s cheaper than the alternative, which is why ships continue to line up for transit slots.

Was Panama price-gouging American ships specifically? There’s no evidence of this. The toll structure is publicly available and applies uniformly to all vessels regardless of flag state. In fact, during the 2023-2024 drought that severely reduced canal capacity — forcing the ACP to cut daily transits from roughly 36 to as few as 22 — Panama imposed surcharges on all users to manage demand. These surcharges were temporary and tied to a genuine operational crisis, not predatory pricing.

The claim that the US was being “ripped off” was, by the numbers, a significant stretch. But it was never really about the fees.

The China Angle: Hutchison, Hong Kong, and the Ports

Here’s where the conspiracy theory gets its teeth, because here’s where the facts are genuinely complicated.

CK Hutchison Holdings — a Hong Kong-based multinational conglomerate controlled by the Li Ka-shing family — operated container ports at both ends of the Panama Canal: the Balboa port on the Pacific side and the Cristóbal port on the Atlantic side. The concession dated to 1997, when Hutchison Whampoa (CK Hutchison’s predecessor) won a 25-year contract with the Panamanian government, later extended to 2047.

This was the factual foundation for Trump’s claim that China was “operating the Panama Canal.” And as factual foundations go, it was about three-quarters bullshit and one-quarter legitimately concerning.

What Hutchison Actually Did

Hutchison operated the ports. Not the canal. The distinction matters enormously, but it got lost in the political rhetoric almost immediately.

The Panama Canal is operated by the Panama Canal Authority — the locks, the waterways, the scheduling, the pilotage, the fee collection. All of it. Hutchison ran the container terminals where ships loaded and unloaded cargo before and after transiting the canal. This is significant commercial infrastructure, but it’s not the same as controlling the canal itself. Think of it this way: the company that runs the parking garages at an airport doesn’t control the runways.

Hutchison Ports is one of the world’s largest port operators, running container terminals in 52 ports across 26 countries, including terminals in the UK, the Netherlands, Australia, Pakistan, and Mexico. The company’s Panama operations represented a small fraction of its global portfolio.

The “Chinese Control” Question

But here’s where it gets complicated: What exactly is CK Hutchison’s relationship to the Chinese government?

CK Hutchison is incorporated in the Cayman Islands and headquartered in Hong Kong. Its controlling shareholder, the Li Ka-shing family, has a famously complicated relationship with Beijing. Li Ka-shing himself was once the richest person in Asia and a towering figure in Hong Kong business. He’s also been criticized by Chinese state media for divesting from mainland China — pulling billions in assets out of the mainland and relocating to jurisdictions beyond Beijing’s reach. In 2015, Chinese state outlets accused him of being “ungrateful” and questioned his loyalty.

This is not the profile of a Beijing puppet.

On the other hand: Hong Kong operates under the “one country, two systems” framework that has been progressively eroded since the 2020 National Security Law. Major Hong Kong business figures exist in a gray zone — theoretically independent of Beijing but practically subject to pressure, persuasion, and the implicit threat that characterizes all Chinese government interactions with the business elite.

Could Beijing theoretically pressure CK Hutchison to restrict US naval access to the canal’s port facilities? In extremis, possibly. Would this constitute “control” of the canal? No — because, again, Hutchison operated ports, not the canal itself. A US Navy vessel doesn’t need Hutchison’s permission to transit the canal; it needs the Panama Canal Authority’s permission. And the US retains treaty rights to defend the canal’s neutrality under the 1977 agreements.

The China narrative was, ultimately, a case of conflating a real but limited concern — a Hong Kong-based firm operating nearby infrastructure — with a much more dramatic claim that China controlled one of America’s most vital strategic assets. It was the geopolitical equivalent of claiming that because a Chinese company operates a hotel near the Pentagon, China controls the US military.

But that distinction didn’t stop it from becoming one of the dominant conspiracy theories of early 2025.

The BlackRock Deal: The Conspiracy Within the Conspiracy

In March 2025, CK Hutchison announced that it would sell its entire global port operations business — including the Panama Canal ports — to a consortium led by BlackRock, the world’s largest asset manager, along with Global Infrastructure Partners (a BlackRock subsidiary) and Terminal Investment Limited (a subsidiary of Mediterranean Shipping Company, or MSC).

The deal was valued at approximately $22.8 billion. It encompassed not just the Panama operations but CK Hutchison’s entire 43-port portfolio across multiple continents.

The timing was, to put it mildly, conspicuous.

Trump had spent three months railing about Chinese control of the Panama Canal. He’d threatened military force. He’d imposed diplomatic pressure on Panama. Members of his incoming administration had publicly warned that the Hutchison concession represented an intolerable national security risk. And then — almost as if on cue — the “Chinese” company announced it was selling everything to an American-led consortium anchored by BlackRock, a firm whose CEO Larry Fink has extensive relationships across Washington’s political establishment.

Conspiracy theories erupted from multiple directions simultaneously:

Theory 1: Trump’s Pressure Worked — The Backroom Deal

The most straightforward theory: Trump’s rhetoric was negotiating theater designed to create enough political and economic pressure to force CK Hutchison to divest. The BlackRock deal wasn’t a spontaneous business transaction; it was the predetermined outcome of a diplomatic squeeze play. Trump gets to claim he “dealt with” the China threat. BlackRock gets a massive global port portfolio at what some analysts considered a discount. CK Hutchison gets out from under the political heat. Everybody wins — except, perhaps, the Panamanian government, which wasn’t consulted about whether it wanted its port operator replaced.

This theory gained traction when reports emerged that members of Trump’s national security team had been in contact with both CK Hutchison and BlackRock representatives in the weeks before the deal was announced. The administration denied orchestrating the sale but acknowledged “encouraging” the outcome.

Theory 2: BlackRock as the Real Power Play

For those already skeptical of BlackRock’s growing global influence, the deal looked like something far more troubling: the transfer of critical global infrastructure from one form of concentrated power to another. CK Hutchison at least operated the ports as a commercial business. BlackRock, critics argued, operates on a different level entirely — it’s not just an investor but a financial architecture that shapes government policy, controls trillions in assets through its Aladdin risk platform, and maintains a revolving door with the US Treasury and Federal Reserve.

“We went from worrying about a Hong Kong company running ports to handing them to a company that manages more money than the GDP of every country in the world except the US and China combined,” one financial analyst told Bloomberg. “I’m not sure that’s an upgrade.”

This line of thinking merged with the broader BlackRock-Vanguard “own everything” narrative — the increasingly widespread belief that a handful of asset management firms exercise effective control over the global economy through their interlocking ownership stakes and institutional influence.

Theory 3: China Didn’t Lose — It Was Paid to Leave

A more cynical interpretation held that the entire episode was orchestrated theater. CK Hutchison had been looking to divest its port operations for years — the business was capital-intensive, low-margin by Hutchison’s standards, and increasingly subject to geopolitical risk. Trump’s rhetoric gave the Li family the perfect cover to cash out at a premium while making it look like they were bowing to American pressure rather than simply taking the best available deal.

Under this reading, Beijing didn’t lose anything — the CK Hutchison ports were never a strategic asset for China in any meaningful sense, and the Li Ka-shing family’s loyalty to Beijing was always questionable. What actually happened was a routine divestiture dressed up as a geopolitical victory for domestic American consumption.

The Drug Trafficking Angle

There’s another conspiracy thread woven through the Panama Canal discourse that gets less mainstream attention but circulates heavily in certain political circles: the narcotics angle.

Panama has long been a transit point for drug trafficking, particularly cocaine moving from South American production zones to North American markets. The country’s geographic position makes it an unavoidable chokepoint. The Darién Gap — the roadless jungle between Colombia and Panama — is a major corridor for both drug smuggling and migrant transit. Panama’s banking sector has historically been permissive in ways that facilitate money laundering. And the canal itself, through which thousands of vessels pass annually with varying degrees of cargo inspection, represents an obvious vector for maritime drug shipment.

Trump’s rhetoric about the canal was intertwined with his broader border security and anti-drug messaging. By linking Panama to the narcotics trade — and by extension to the national security argument for US control — the canal narrative became part of a larger story about America under siege from foreign threats that only muscular American action could address.

The conspiracy theory version goes further: that Panamanian officials are complicit in drug trafficking and that the canal’s operational independence serves to protect narco-logistics networks that would be disrupted if the US reasserted control. This echoes, consciously or not, the justification for the 1989 US invasion of Panama, when the George H.W. Bush administration overthrew Manuel Noriega — a former CIA asset turned drug trafficking kingpin — in what was officially called Operation Just Cause.

The historical parallel is uncomfortable in both directions. The US invaded Panama in 1989 ostensibly to combat drug trafficking — but Noriega had been on the CIA payroll for years while actively facilitating the cocaine trade. The American government was aware of his drug connections and tolerated them as long as he remained geopolitically useful. The invasion happened only after the relationship soured for reasons that had nothing to do with drugs.

If you’re looking for a precedent that explains why Panamanians might be skeptical of American claims to be motivated by concern for narcotics enforcement, you don’t have to look very far.

The Neo-Imperialism Theory

On the left, the dominant interpretation of Trump’s Panama Canal gambit was simpler and darker: this was straightforward neo-imperialism.

The argument goes like this: Trump’s simultaneous demands for the Panama Canal, Greenland, and Canadian absorption weren’t random provocations or negotiating tactics. They were an ideological project — the reassertion of American dominion over the Western Hemisphere under the framework that earlier generations called Manifest Destiny and the Monroe Doctrine.

The Monroe Doctrine, proclaimed in 1823, declared the Western Hemisphere off-limits to European colonial expansion. In practice, it became the ideological foundation for a century of American intervention in Latin America — from the overthrow of Guatemala’s government in 1954 at the behest of the United Fruit Company to the CIA-backed coups and state terror of Operation Condor across South America in the 1970s and 80s. The doctrine has been formally repudiated by every Latin American government but has never been officially retired by the United States.

Trump’s language about the Panama Canal — the insistence that it was “ours,” that it was “foolishly given away,” that it could be “taken back” — mapped directly onto the Monroe Doctrine tradition. And his parallel moves on Greenland (a sovereign territory of Denmark that Trump wanted to purchase or claim) and Canada (where he repeatedly “joked” about making it the 51st state) created a pattern that looked less like ad hoc deal-making and more like a coordinated project of territorial expansion.

Critics noted that the Panama Canal rhetoric dovetailed with the broader agenda outlined in Project 2025 — the Heritage Foundation’s comprehensive blueprint for a second Trump administration, which called for aggressive assertion of American power abroad and rolling back international commitments that constrained US unilateral action.

Whether you consider this a “conspiracy” depends on your definitions. The territorial demands were made publicly. The ideological framework was published. The historical pattern is well-documented. If it’s a conspiracy, it’s the most loudly announced one in American history.

Panama’s Response

Panamanian President José Raúl Mulino was unequivocal. Within hours of Trump’s initial comments, Mulino issued a statement declaring: “Every square meter of the Panama Canal and its adjacent zone belongs to Panama, and it will remain so.” He rejected the claim that the canal was operated by China or any other foreign power, noting that the Panama Canal Authority is an autonomous agency of the Panamanian government staffed entirely by Panamanian citizens.

Mulino also pushed back on the fees narrative, pointing out that canal tolls are set by an independent board and apply equally to all nations. “The canal is not a concession from anyone,” Mulino said. “It is the patrimony of our country.”

The Panamanian foreign ministry summoned the US ambassador for consultations — a diplomatic step that signals serious concern without severing relations. Across Latin America, the response was universally critical. The Organization of American States issued statements supporting Panamanian sovereignty. Mexico, Colombia, Brazil, Chile, and others expressed solidarity with Panama. Even governments that had maintained cordial relations with Trump’s first administration publicly rejected the canal claim.

The reaction was significant not just for its unanimity but for its speed. Latin American governments read the room almost immediately: if the United States could credibly threaten to “take back” the Panama Canal, then no territorial arrangement in the hemisphere was safe. Every US military base, every trade agreement, every diplomatic understanding about sovereign boundaries was suddenly contingent on whether a future American president decided that the original deal had been “foolish.”

What Actually Changed — and What Didn’t

Here’s the scorecard as of early 2026:

The canal: Still operated by the Panama Canal Authority. Still Panamanian sovereignty. No US military action. No change in the legal status established by the 1977 treaties.

The ports: CK Hutchison’s sale to the BlackRock-led consortium was finalized. The ports at Balboa and Cristóbal are now operated under American-aligned corporate management. If the goal was to remove Hong Kong-based companies from canal-adjacent infrastructure, it was achieved — whether by Trump’s pressure, market forces, or some combination of both.

The rhetoric: Quietly dropped. After the CK Hutchison sale, Trump’s canal commentary essentially evaporated. There were no more threats of military force. No demands for the canal’s return. The issue served its purpose and was set aside.

The precedent: Very much alive. The episode demonstrated that American presidents can make territorial claims on sovereign nations, decline to rule out military force, and face no meaningful domestic political consequence. Whether future administrations build on this precedent — and whether Latin American nations adjust their strategic planning accordingly — remains an open question.

Timeline

• 1903: US-backed Panamanian independence from Colombia; Hay-Bunau-Varilla Treaty grants US the Canal Zone “in perpetuity”
• 1904-1914: Canal construction; approximately 5,609 workers die
• 1964: Martyrs’ Day uprising; 21 Panamanians and 4 US soldiers killed in Canal Zone riots
• September 7, 1977: Torrijos-Carter Treaties signed, establishing timeline for canal transfer
• December 31, 1999: Full control of canal transferred to Panama
• 1997: Hutchison Whampoa wins concession to operate Balboa and Cristóbal ports
• 2016: Expanded canal locks open, accommodating larger Neopanamax vessels
• 2023-2024: Severe drought reduces canal capacity, forcing transit restrictions and surcharges
• November 5, 2024: Trump wins presidential election
• December 21, 2024: Trump declares US should “take back” the Panama Canal
• December 22-23, 2024: Trump escalates on Truth Social; refuses to rule out military force
• December 2024: Panamanian President Mulino rejects Trump’s claims
• January 20, 2025: Trump inaugurated for second term
• March 2025: CK Hutchison announces sale of global port operations to BlackRock-led consortium for $22.8 billion
• 2025: Sale finalized; Panama Canal ports transfer to BlackRock/GIP/MSC management

The Bigger Picture

The Panama Canal conspiracy theories are interesting not because any single one is fully correct, but because they reveal the tectonic forces reshaping global power in the 2020s.

The China hawk theory — that Beijing was using Hutchison as a Trojan horse to control critical Western Hemisphere infrastructure — vastly overstated the nature and extent of Chinese involvement. But it reflected real anxiety about China’s expanding global footprint, from Belt and Road investments to the TikTok debate to the broader question of whether economic interdependence with China represents a security threat.

The BlackRock theory — that the port sale was a coordinated transfer from one form of opaque corporate power to another — fed into legitimate concerns about the concentration of global asset management in a handful of Western firms. Whether that represents an improvement over a Hong Kong-based operator depends entirely on your threat model.

The neo-imperialism theory — that this was old-fashioned American muscle-flexing — has a century of historical evidence on its side, from Teddy Roosevelt to the CIA’s Latin American interventions to the 1989 Panama invasion.

And the narcotics theory — that controlling the canal is part of a broader strategy to choke drug trafficking routes — echoes decades of American policy in the region, policy that has a well-documented history of being compromised by the very agencies charged with enforcing it.

The uncomfortable truth is that all of these theories contain elements of legitimacy, and none of them tell the complete story. The Panama Canal is not controlled by China. It was not “taken back” by the United States. The BlackRock deal may or may not have been a backroom arrangement. And Trump’s rhetoric may have been strategic, opportunistic, or both.

What’s clear is this: the Panama Canal remains what it has been since 1903 — a 50-mile stretch of water that concentrates enormous geopolitical, commercial, and strategic significance into one of the smallest sovereign nations on Earth. And as long as that asymmetry exists, there will be conspiracy theories about who really controls the thing, and why.

Sources & Further Reading

• Torrijos-Carter Treaties, full text — US State Department archives
• Panama Canal Authority Annual Reports, 2020-2025
• “Trump Says He Won’t Rule Out Force to Take Greenland and Panama Canal” — The New York Times, December 2024
• “CK Hutchison to Sell Global Port Operations to BlackRock-Led Consortium” — Financial Times, March 2025
• McCullough, David. The Path Between the Seas: The Creation of the Panama Canal, 1870-1914 (2001)
• Lindsay-Poland, John. Emperors in the Jungle: The Hidden History of the U.S. in Panama (2003)
• “The Panama Canal at 25: How Panamanian Control Changed Everything” — Foreign Affairs, 2024
• Panama Canal Authority official toll schedules, 2024-2025
• CK Hutchison Holdings investor disclosures, annual filings
• “Operation Just Cause: The US Invasion of Panama” — National Security Archive, George Washington University