John Jefferson
In a late-night message on Truth Social, President-elect Donald Trump let off a proverbial shot over the bow, threatening to retake Panama Canal. He accused Panama of levying unnatural charges on U.S. shipping and wrecking the preconditions of strategic neutrality that resulted in the handover of the canal in 1999. Invoking the roughly 40,000 American lives lost during the construction of the canal, Trump derided the Carter-era treaty handing over the canal to Panama for the token price of $1 and warned that the U.S. won’t forget the unjust treatment.
“The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the U.S. This complete ‘rip-off’ of our Country will immediately stop,” Trump wrote, adding that it was solely for Panama to manage, not “China, or anyone else.”
The call to take back the Panama Canal could radically alter the quarter-century old social arrangement that goes by the name of the liberal rules-based international order, more than perhaps anything in the world. The British transfer of Hong Kong to China in 1997 was shortly followed by the equally symbolic transfer of control of the Panama Canal to Panama, ending a century and a half of American colonial tenure over the canal, on December 31, 1999. Although the transfer of the Canal was decided in the ridiculously short-sighted Torrijos–Carter Treaties in 1977, it was 1999 that effectively and formally ended the American colonial presence in the region, ushering in an era where wars were no longer supposed to be fought over land, but over rights.
This theoretical paradigm shift at the height of American liberal intellectual hubris was predicated on a borderless democratic peace and the “end of history,” marking the end of the era of great powers dominating world affairs. The world would now be one interconnected “global village” of trade; the most formidable hegemonic power in human history was, like Fenrir in Norse mythology, also bound by self-imposed chains of norms, only to intervene when abstract human rights were in danger of violations by malevolent actors.
Of course, the trouble with that was twofold. First, rights are abstract, culturally determined, and often prone to misinterpretation—as is misconduct based on misinterpretations. And, second, despite being genuinely more benevolent than any other previous empire or hegemony in history, unipolarity compelled the United States to commit geopolitical mistake upon mistake due to a combination of sheer idealism and the lack of structural balance or rivals. These mistakes now haunt us, from Iraq to Libya and Syria and Ukraine. The Panama canal handover was the epitome of such liberal idealism at the zenith of American unipolarity, two years before 9/11 ushered in the Global War on Terror.
Donald Trump’s consideration of retaking the canal isn’t new; he hinted at his dissatisfaction with the arrangement in 2017 as well. More significant, in this context, is that the worry about Panama falling under Chinese control is bipartisan. In 2021, a CSIS paper warned that Panama is not effectively neutral anymore, with the Chinese state having much more power and influence over the Panamanian government than previously understood. More recently, in 2023, President Joe Biden’s ambassador to Panama, Mari Carmen Aponte, warned that Panama might have to choose between the U.S. and China soon.
Her report also suggested that, “currently, China controls two of Panama’s five principal zone ports through Hong Kong-based Hutchison, with one on each side of the waterway at Balboa and Cristobal. Chinese companies are finishing work on the Amador Pacific Coast cruise terminal.” As Casey Chalk reported in these pages,
“There’s five…Chinese state-owned enterprises along the Panama Canal,’ commander of U.S. Southern Command General Laura Richardson warned in August. “What I worry about is their being able to use it for dual use. Not just civilian use, but flip it around and use it for military application.”
This also brings into forefront one of the most interesting natural experiments to observe for social scientists. How does an order change? The question is one of the most puzzling in international relations, because there is no single answer. Sometimes it is dramatic and precipitous. The First World War saw the collapse of four multiethnic empires, the near-bankruptcy of a fifth, the simultaneous rise of two hegemonic peer rivals who would then battle for supremacy for the rest of the century, and the death of a world-spanning civilization from which its constituents never quite recovered. The end of the Cold War marked another such rapid collapse.
But more often than not, dramatic events only demonstrate the nominal end of an order that has already frayed. The Suez Crisis marked the formal end of the British imperial power, but the imperial hegemony was already long gone. The reconquest of Crimea in 2014 must have signaled another such fraying, as territorial conquest and reordering balance by force returned to form. The industrial revolution led to European colonialism and a European order.
The call to retake Panama is one such event. The world as we know is already more imperial and mercantilist, from the Russian reconquest of parts of Ukraine to the de facto Turkish–Israeli division of Syria. “Post-colonialism” in academic practice ironically has given birth to an even more primitive, ruthless form of imperialism—due to the sole fact that only the Euro-Americans have decided to follow the normative rules of no territorial conquest. No one else in the world is following them anymore. (It is an academic exercise to note how long it took for the Anglosphere to catch up on that.)
The structural factors are even more important. American retrenchment due to the rise of peer rivals has resulted in an unintended interregnum where the balance is still not established and the world is increasingly up for grabs. America is too tired from its wars of choice, too focused on the rise of a gigantic new challenge in the Pacific, as well as not financially capable enough to use punitive force on its own to deter predatory powers, whether a rival such as Russia or “allies” such as Turkey and Israel.
Yet, simultaneously, the total concentration of wealth, tech, and higher ed is still mostly in the English-speaking countries, especially in the Five Eyes countries, and most overwhelmingly in the United States of America. The top ten American oligarchs can essentially, if they so wish, just buy the continent of Africa and Latin America, or create mercenary armies that will dwarf the power of most midsize European states. For some weird reason, those grandees are the only ones still stuck with nostalgia for a world that was designed as late as 1945, where rights still nominally matter more than might. That, in itself, is unsustainable.
There are no fixed rules of international relations. But there are some observable and timeless patterns. One such pattern is that the overwhelming disparity in wealth and technological advantage results in the total lack of democracy and equality in the international system. The Industrial Revolution in Britain and Europe led to European domination of the international system for 300 years. The Second Industrial Revolution, nuclear weapons, computerization, and the internet led to American hegemony. The structural factors such as the rise of China and an emerging multipolarity, disparities in financial and military power, and the Third Industrial Revolution in technology such as AI and drones will inevitably result in calls to return to an older form of statecraft, one of balance of power, colonial diplomacy, mercantilism, and spheres of influence, and, even in some cases, outright conquest—not dissimilar to how the world was during the late 19th century. Calls to retake the Panama Canal should be considered only a start.
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