On Jan. 9, 1964, 200 Panamanian high school students marched peacefully to Balboa High School, located in the heart of the Canal Zone. Panamanians widely resented the U.S.-controlled district as a colonial enclave within their own country. The protesters sought to raise the Panamanian flag alongside the school’s lone U.S. flag, symbolizing a demand for national sovereignty and an end to U.S. rule.
U.S. police officers allowed only six students to proceed to the school, where they were met by a crowd of more than 2,000 Americans, who booed and verbally attacked the protesters and physically desecrated the Panamanian flag. As the students fled, they defended themselves with stones and were met with gunfire in response. News of incident sparked nationwide protests and clashes with U.S. police and military personnel. By the end of the crisis, Panama had severed its already strained diplomatic relations with the United States, and 21 Panamanians and four Americans had lost their lives.
These events, known as Martyrs’ Day, are remembered in Panama as a symbol of the fight for sovereignty. More than 60 years later, however, these old wounds are resurfacing.
Since taking office, U.S. President Donald Trump has displayed an imperial fixation on Panama. In his inaugural address, he said, “China is operating the Panama Canal, and we didn’t give it to China—we gave it to Panama, and we’re taking it back.” He also accused Panama of overcharging U.S. ships to use the canal.
Over the weekend, U.S. Secretary of State Marco Rubio escalated these threats on a visit to Panama, part of his first foreign trip as secretary.
A State Department spokesperson said that in a meeting with Panamanian President José Raúl Mulino, Foreign Minister Javier Martínez-Acha, and other members of the cabinet, Rubio relayed that Trump believes “the current position of influence and control of the Chinese Communist Party over the Panama Canal area is a threat to the canal and represents a violation of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal.”
Rubio warned that unless immediate changes are made, the United States would be required to take necessary measures to protect its rights under the treaty.
Mulino downplayed concerns, suggesting that the United States was more focused on Chinese-operated ports rather than the canal itself.
But on Sunday, Trump doubled down to reporters: “We’re going to take it back, or something very powerful is going to happen.”
It remains to be seen whether Trump is bluffing to score political points, or else using escalation to strong-arm Panama for concessions in other areas. The problem with these threats, however, is that they are based entirely on false premises.
The events of Martyrs’ Day were a watershed moment in Panama. They distilled a sense of national identity and rallied activists at home and abroad around aspirations for sovereignty.
Once ties between the United States and Panama were reestablished, the two parties began to negotiate a new agreement that would return the canal to Panama. The U.S. decision to negotiate at that time was influenced by a combination of international pressure, shifting political attitudes toward decolonization and sovereignty among Latin American countries, and diplomatic pragmatism.
U.S. Secretary of State Henry Kissinger warned that failing to secure a new treaty could result in severe international repercussions and unrest in Latin America: “If these [canal] negotiations fail, we will be beaten to death in every international forum and there will be riots all over Latin America.”
The Torrijos-Carter Treaties, signed in 1977, were an essential step toward normalizing relations between the two countries and addressing Panamanian demands for control over the canal. The Neutrality Treaty, the first of the two agreements, ensured the canal’s perpetual neutrality, guaranteeing access for all nations while preserving the United States’ right to intervene if its neutrality was threatened. The other, the Panama Canal Treaty, set a firm deadline for ending U.S. control over the canal, giving Panama full sovereignty by Dec. 31, 1999.
The treaties have held strong, and since the turn of the century, the Panama Canal has belonged exclusively to Panama. These facts, however, seem to be lost on those in power in Washington, who have conflated—intentionally or unintentionally—Chinese companies operating nearby ports with Chinese control of the canal itself.
At his confirmation hearing in January, Rubio called out these ports, located at both ends of the Panama Canal, which U.S. military and security officials have long warned could be weaponized during a geopolitical crisis. These fears were echoed in a recent hearing—highly criticized in the Panamanian press—by the U.S. Senate Committee on Commerce, Science, and Transportation to discuss the canal’s role in global maritime trade, alleged violations of the Neutrality Treaty and China’s supposed control over the interoceanic route.
The ports in question—Balboa and Cristobal—have been operated by Hong Kong-based Hutchison Ports Holding since 1997. While Hutchison Ports Holding is not a Chinese state-owned entity, many in the United States worry about Beijing’s influence—similar to fears over TikTok and DeepSeek—given that Hong Kong’s companies are legally required to disclose information to Beijing upon request.
Hutchison, a company built on market principles, has little incentive to scare off investors or disrupt global trade by routinely handing over strategic information to the Chinese government, although the erosion of Hong Kong’s political and economic freedoms has admittedly made such concerns difficult to dismiss.
Regardless, Trump and his allies’ assertions that the canal’s neutrality has been threatened—by China or any other foreign country—are completely baseless. The canal is operated and managed exclusively by the Panama Canal Authority, a government agency. Year after year, the United States has been the primary user of the canal, accounting for 74.7 percent of total cargo traffic in 2024. China accounted for 21.4 percent, followed in third and fourth by Japan and South Korea. Panama has reiterated that all canal customers, regardless of nationality, pay the same fees.
U.S. concerns, then, may have more to do with broader Chinese influence in the region. During his confirmation hearing, Rubio noted Beijing’s involvement in military installations, including in Cuba. He accused China of using debt traps and bribes to gain leverage over Latin American countries and claimed that in 2016 and 2017, China conditioned investments in Panama on the country’s efforts to persuade the Dominican Republic and others to sever diplomatic ties with Taiwan.
Indeed, over the past two decades, China has sought to expand its influence in Panama and Latin America. A pivotal moment came in 2017, when then-President Juan Carlos Varela officially cut Panama’s ties with Taiwan and recognized Beijing’s “One China” policy. This proved controversial due to unproven allegations that Varela received a $143 million bribe from China. The Chinese Embassy in Panama has strongly denied any involvement in bribery or illicit financial dealings.
In 2018, Panama became the first country in Latin America to join China’s Belt and Road Initiative, which has generated several ambitious infrastructure projects in varying stages of progress.
But some observers are skeptical of China’s presence. They disagree with Varela’s shift toward China and his successor Laurentino Cortizo’s controversial 2021 decision to extend the Hutchinson Ports contract, especially given the company’s alleged failure to pay the government dividends that it owes. In this context, some Panamanians see cutting ties with Chinese business as ultimately in the country’s best interest, rather than a capitulation to U.S. pressure.
But others view Washington’s stance as a form of intimidation, possibly a tactic to secure reduced canal transit fees for U.S. ships. It is unlikely that the United States could secure special tariffs for its vessels. Allowing any country to benefit from preferential tariffs would not only violate international law but would also set a dangerous precedent, compromising Panama’s ability to independently and equitably manage the canal.
For what it’s worth, Mulino didn’t seem too worried following Rubio’s visit.
He made it clear that any U.S. concerns regarding Chinese-operated ports should be addressed through technical discussions with the Panama Canal Authority. He also emphasized that Panamanian authorities are already conducting an unprecedented audit of those ports and that any decisions will be based on the audit’s findings.
As for Trump’s threats to take back control of the canal, the feasibility of such an action seems highly unlikely. Given Panama’s constitutionally enshrined operational autonomy over the canal, any drastic changes to canal management would require significant legal and diplomatic negotiations. Mulino stressed that there is no real threat to the Panama Canal Treaty, no legal grounds for U.S. intervention, and no justification for speculation about U.S. military or economic action.
Mulino did, however, seem to take some of the United States’ pressure to heart. He announced plans to expand Panama’s agreement with the U.S. Department of Homeland Security to facilitate the repatriation of irregular migrants from countries such as Venezuela, Colombia, and Ecuador, and offered use of the Metetí airstrip in the Darien province to support deportation processes.
On economic matters, Mulino also said that his government will not renew its participation in China’s Belt and Road initiative and may even end its involvement before the deal’s expiration.
However, if Washington cares about countering Chinese influence, it will likely need to play a more positive, proactive role in the region. Mulino urged the United States to increase its investment in Panama, warning that Washington’s disengagement—exemplified by the period of four years without a U.S. ambassador, from 2018 to 2022—has created a vacuum that other countries have filled.
Though Trump’s demands are particularly brazen, the story of the past few weeks is all too familiar to Panamanians, who have not forgotten what Martyrs’ Day represented. The issue of sovereignty has been top of mind in recent years—particularly in 2023, when widespread public opposition erupted over the government’s decision to grant a long-term contract to a Canadian mining company.
Panamanians are steadfast in their determination to protect the canal and aware that any attempt by the United States to seize control would be not only unrealistic, but also a blatant breach of established legal, diplomatic, and international norms.
But they remain vigilant. On Jan. 28, a coalition of civil society groups released a statement condemning any potential foreign intervention, reaffirming Panama’s sovereignty over the canal, and calling on defenders of democracy across the Americas to remain vigilant and to oppose any interventionist action by the United States against Panama.
“Panama must not once again suffer the consequences of an unjustified military or economic aggression under the guise of U.S. interests,” the statement read. “The Panama Canal belongs to Panama, not to the United States nor to China.”
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