About 10 years ago, Louis Sola’s family maritime business was given a concession to build a marina and cruise port on Amador, a causeway located at the Pacific entrance to the Panama Canal.
“This would have been the very first cruise port in the Pacific,” Sola, who now serves as the U.S. Federal Maritime Commission chairman, said.
Everything changed in 2017 when Panama signed on with the Chinese regime’s Belt and Road Initiative. The initiative required the Panamanian government to recognize Taiwan as part of China—much to the surprise and concern of the United States, which has positioned itself as an ally of Taiwan.
Panama then rescinded the concession on the land where the Sola family had planned to spend $30 million on a cruise port.
Instead, Panama nationalized the project, gave a concession to a Chinese company, and paid it $300 million to build the cruise port.
Additionally, the land that would have been used to build a marina was designated as an embassy of the People’s Republic of China.
Eventually, the Solas got the land back, and U.S. and domestic pressure ended the Chinese regime’s plans of building an embassy at Amador.
In the most recent blow to China, Panama’s president announced on Feb. 2 that it will not renew its Belt and Road agreement with the Chinese Communist Party (CCP)—a significant win for President Donald Trump’s pressure campaign.
Beijing’s Influence
Sola’s personal story, told during a Jan. 28 Senate Committee on Commerce, Science, and Transportation hearing, underscores what has become a hot-button topic—Chinese influence at the Panama Canal.
The 100-year-old strategic waterway, largely ignored in U.S. policy for decades, has taken center stage in growing tensions between Beijing and Washington.
Chinese infrastructure and ports on both the Atlantic and Pacific ends of the Panama Canal have some experts concerned that Beijing has de facto control of the strategic waterway, a potential violation of the U.S.–Panama Neutrality Treaty, which places U.S. national security at risk.
While military leaders have raised the alarm over the Chinese regime’s rising influence at the Panama Canal and throughout Latin America, the issue came to the forefront when incoming President Donald Trump announced on social media in December 2024 that the canal was “solely for Panama to manage, not China.”
Trump also complained that U.S. ships, which are the top users of the canal, were being “ripped off” with high fees, another potential violation of the treaty to deal with all nations fairly.
After taking office in January, Trump said the canal was being operated by the Chinese regime and vowed to intervene, prompting denials from Beijing and Panama.
“China is operating the Panama Canal,” Trump said during his inaugural speech. “And we didn’t give it to China. We gave it to Panama, and we’re taking it back.”
National Security Risk
Chinese soldiers don’t have to be on the ground for the CCP to disrupt the canal and jeopardize U.S. national security should the United States be drawn into a conflict with the Chinese regime over Taiwan, according to Andrés Martínez-Fernández, a senior policy analyst for Latin America at the Heritage Foundation.
The fact that two of Panama’s five principal ports are controlled by Hong Kong-based CK Hutchison Holdings—at Balboa on the Pacific side and at Cristóbal on the Atlantic side—is a significant concern for some analysts.
Equally worrisome, in 2018 a Chinese consortium headed by China’s state-owned China Harbour Engineering Company and China Communications Construction Company was awarded a $1.4 billion contract for the canal’s fourth bridge.
“The canal is very vulnerable to any kind of sabotage,” Martínez-Fernández told The Epoch Times. “We’re not talking a [Chinese] warship in order to do that.”
The canal has both economic and military significance for the United States because it represents a strategic chokepoint, making it a critical pathway for U.S. warships in the Atlantic and Pacific oceans in the case of military conflict with the Chinese regime.
Some $270 billion of cargo passes through the canal each year, amounting to 5 percent of global maritime trade volume. More than 70 percent of that transits to or from U.S. ports.
The United States handed sovereignty of the Panama Canal to Panama on Dec. 31, 1999, under a treaty signed in 1977 by President Jimmy Carter.
The agreement included the Neutrality Treaty, in which the United States retained the right to use military force to secure the canal from foreign aggression or threats to its neutrality.
For Panama, the canal is part of its national identity and its biggest moneymaker, generating some $28 billion for the country over the past 25 years, according to Panama.
Panamanian President José Raúl Mulino said on Jan. 30 that it would be “impossible” to return the canal to U.S. control and that Panama could not arbitrarily remove concessions from companies linked to China, referring to the Hutchison ports.
However, Panama announced in January that it is auditing the Chinese port concessions.
Panama Ports Co., controlled by CK Hutchison Holdings, was notified of an audit shortly after Trump’s accusations that the CCP controls the waterway, according to the Panama Maritime Authority.
Martínez-Fernández said he believes the most likely diplomatic solution to the U.S. concern over national security will be to reduce Chinese presence along the canal and ports.
“These investments in this infrastructure from China, around the canal, around other parts of the region, the Caribbean, and South America just raise a lot of red flags,” he said.
Meanwhile, the Chinese regime has publicly supported Panama’s ownership and control of the canal, playing on Panama’s national identity and sovereignty to strengthen its political foothold.
Wang Yi, Chinese state councilor and CCP foreign minister, called Panama a “friend and good partner” during a 2021 phone call with Erika Mouynes, the Panamanian foreign minister.
Yi stated that China would “continue to support Panama’s efforts to defend its legitimate rights and interests on the international stage, including Panama’s sovereignty over the canal.”
Neutrality Issue
When flying into Panama, billboards advertising the Bank of China greeted visitors until recently.
According to residents in Panama who spoke with The Epoch Times, the billboards were taken down right before U.S. Secretary of State Marco Rubio met with Panama’s president on Feb. 2.
The billboards highlight Beijing’s influence in Panama, and Trump, in a post on social media shortly before Rubio’s visit, said Panama was attempting to take down 64 percent of signs written in Chinese.
“They are all over the [Panama Canal] Zone because China controls the Panama Canal,” Trump stated on Jan. 28. “Panama is not going to get away with this!”
Although Panama decided not to renew its Belt and Road agreement with China directly after Rubio’s visit, the fact remains that two of Panama’s key ports are controlled by a Hong Kong-based company.
CK Hutchison Holdings first won a bid to operate those two ports in 1997, but since then, Beijing has cracked down on the city’s independence and brought it firmly under the communist regime’s control.
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