Fact Check: Does China control the Panama Canal, as Trump suggests?

President-elect Donald Trump has sparked controversy by suggesting the United States should reclaim control of the Panama Canal, citing overcharges for its use and alleged Chinese influence over the waterway.

During the past week, Trump has criticized Panama for increasing fees, warning that if the issue doesn’t improve after he takes office next month, he will demand the canal’s return to the U.S.

Trump’s remarks prompted a strong response from Panamanian President Jose Raul Mulino, who stated in a video on Sunday, “Every square meter of the canal belongs to Panama and will remain so.”

The Claim

On Christmas Day, Trump took to Truth Social to criticize China’s involvement in the Panama Canal, raising concerns over Beijing’s influence on the critical waterway.

“Christmas greetings to all, including the wonderful soldiers of China, who are lovingly, but illegally, operating the Panama Canal,” Trump wrote. He went on to reference the canal’s history, saying that “we lost 38,000 people in its building 110 years ago,” yet the United States continues to invest billions in repairs while having “absolutely no say” in its operation.

The Facts

The Panama Canal, a 51-mile waterway connecting the Atlantic and Pacific Oceans, has been under Panamanian control since December 31, 1999, following the 1977 Torrijos-Carter Treaties. These agreements guaranteed the canal’s neutrality and access for global shipping, while transferring administrative authority to Panama.

After Trump posted the remarks, Mulino denied allegations of Chinese control over the canal. “China does not control or administer the canal. When it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag.”

While a subsidiary of Hong Kong-based CK Hutchison Holdings manages two ports at the canal’s entrances, with Chinese firms funding construction of a new bridge over the canal to the tune of over $1 billion, this does not equate to control of the canal’s operations. The Panama Canal Authority, an autonomous government agency, oversees the canal’s administration.

Without directly naming Trump, Mulino defended the canal’s operations, explaining that the canal’s tariffs are determined transparently and are essential for its maintenance and expansion. He highlighted Panama’s significant investments in expanding the canal to increase ship traffic.

“The tariffs are not set on a whim,” he said. “Shipping fee increases help pay for improvements.”

The Panama Canal is most frequently used by the U.S., China, Japan and South Korea. In October, the Panama Canal Authority reported earning nearly $5 billion during the last fiscal year.

The Ruling

False. While Chinese companies manage two of the five ports near the Panama Canal and have invested in related infrastructure, these activities are distinct from the canal’s governance and operations. The Panama Canal Authority has maintained full control of the canal since 1999, when Panama regained sovereignty over the waterway.

FACT CHECK BY NEWSWEEK