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January 3, 2025 | by

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It was a Christmas message that nobody noticed coming.

On Dec. 25, President-elect Donald J. Trump went on his social media platform, Fact Social, to want a “Merry Christmas to all, together with to the great troopers of China, who’re lovingly, however illegally, working the Panama Canal.”

Mr. Trump’s declare is fake. The Panama Canal is operated by an company of the Panamanian authorities, not by Chinese language troopers. In a information convention, President José Raúl Mulino of Panama disputed Mr. Trump’s statements, saying that there have been “no Chinese language within the canal” past these in transiting ships or on the customer heart.

“There may be completely no Chinese language interference or participation in something that has to do with the Panama Canal,” Mr. Mulino mentioned.

Whereas Mr. Trump’s declare was inaccurate, the growing influence of Chinese companies and the Chinese government over transport and world ports, together with the Panama Canal, has turn out to be a priority for U.S. officers.

The Chinese language authorities has invested closely in constructing ports all through the world. And on condition that China is the world’s largest exporter, non-public Chinese language firms now play a serious function in transport and port operations, giving them vital affect over the motion of world items and strategic positions from which to watch different nations’ actions.

Brian Hughes, a spokesman for the Trump-Vance transition crew, mentioned in an announcement that “Chinese language management of the Panama Canal completely poses a nationwide safety menace to the U.S.”

He pointed to congressional testimony final yr by Gen. Laura J. Richardson, the pinnacle of U.S. Southern Command, that Chinese language infrastructure investments function “factors of future multi-domain entry” for the Chinese language army.

The Panama Canal was constructed by america at the start of the twentieth century, however handed again to the Panamanian authorities in 1999, below the phrases of an settlement struck by President Jimmy Carter. That call has lengthy been a supply of consternation for some Republicans together with his successor, President Ronald Reagan.

A lot of the priority of U.S. officers in more moderen occasions facilities on two seaports at both finish of the Panama Canal, a channel by which 40 p.c of U.S. container site visitors runs. These seaports have been operated for many years by Hutchison Ports PPC, a division of CK Hutchison Holdings, a Hong Kong-based firm.

CK Hutchison is a publicly listed conglomerate whose largest proprietor is a household of Hong Kong billionaires, not the Chinese language authorities. However Beijing has prolonged its national security laws to Hong Kong, and the Chinese language authorities has not too long ago proven willingness to weaponize provide chains (one thing that Beijing additionally accuses america of doing).

That has U.S. officers on each side of the aisle more and more nervous that the Chinese language authorities may exert affect over non-public firms to close down industrial and army shipments in a time of battle.

In a congressional listening to in Could, Consultant Raja Krishnamoorthi of Illinois, the Democratic rating member of the Home Choose Committee on China, questioned an skilled who was testifying earlier than Congress about whether or not the Chinese language authorities may exert management over Panamanian ports to delay U.S. shipments, for instance, within the occasion of a battle over Taiwan.

“I share your concern,” Daniel Runde, a senior vp on the Heart for Strategic and Worldwide Research, a Washington suppose tank, informed him. Mr. Runde mentioned that the federal government of Panama managed the whole canal, however that in an excellent world, Hong Kong-controlled firms wouldn’t be managing the ports subsequent to them.

A latest report by Technique Dangers, an analytics agency, mentioned that no direct hyperlinks particular to Panama had been discovered between CK Hutchison and the Chinese language Communist Get together, however that the corporate’s involvement in managing the Panama Canal ports raised safety issues attributable to its mum or dad firm’s ties to China. As a Hong Kong firm, CK Hutchison is topic to Chinese language jurisdiction — together with legal guidelines that may require firms to help in intelligence gathering or army operations — and it has cooperated with varied Chinese language state-linked entities on enterprise tasks, the report mentioned.

Company information retrieved by Wirescreen, a knowledge platform, present that, by a community of subsidiaries, CK Hutchison co-owns an actual property three way partnership with Aviation Trade Company of China, one in all China’s largest protection firms.

CK Hutchison and Hutchison Ports didn’t reply to requests for remark.

The presence of Chinese language firms close to the port in Panama is hardly distinctive. CK Hutchison is without doubt one of the world’s largest port firms, working 53 ports in 24 nations, together with the Netherlands, the UK, Hong Kong and Australia.

Michael R. Wessel, who was a member of the U.S.-China Financial and Safety Assessment Fee, a authorities company that examined the port security issue, mentioned that affect over ports was necessary for quite a lot of causes, together with political and financial affect, and the potential for surveillance.

Ninety p.c of U.S. army cargo travels by industrial ships, he mentioned, giving port operators perception when the federal government steps up operations in sure locations. Port possession may also present clues into how the U.S. authorities screens cargo for safety dangers, which may make it simpler to evade these efforts, Mr. Wessel mentioned.

“Being a port or terminal operator provides you the power to entry or have data of what the U.S. authorities is searching for, which containers is perhaps focused for further analysis,” he mentioned.

In February, the Biden administration announced an effort to strengthen cybersecurity at U.S. ports and fund home manufacturing of cargo-moving port cranes, that are more and more being produced by Chinese language firms. And in July, lawmakers introduced legislation to require the Protection Division to watch China’s affect over ports.

In an advisory last year, the U.S. authorities cautioned port operators that foreign-made port tools and software program may create vulnerabilities in transportation networks. The advisory highlighted the dangers of Chinese language safety tools used for explosion detection and facial recognition, and ship-to-shore cranes that may be managed remotely.

Panama’s rising openness to China in recent times has helped to gas issues in america about Beijing’s affect. In 2017, Panama cut its diplomatic ties with Taiwan and acknowledged Beijing as the federal government of China. The subsequent yr, Panama turned the primary Latin American nation to signal on to China’s world infrastructure program, the Belt and Highway Initiative.

However since then, there was rising apprehension in Panama about accelerating flows of commerce and funding from China, mentioned Jason Marczak, a Latin America skilled on the Atlantic Council, a Washington suppose tank.

Panama has partnered with america to expand its chips industry. And since Mr. Mulino’s authorities got here into workplace final yr, Panama has been unequivocal in its need to deepen ties with america and to extra broadly align with U.S. international coverage goals, Mr. Marczak mentioned.

“An over-dependence on China is one thing that the Panamanians wish to keep away from,” he mentioned.

Liu Pengyu, the spokesman for the Chinese language Embassy in Washington, mentioned that China had lengthy supported Panama’s sovereignty over the canal and acknowledges it as a completely impartial worldwide waterway.

A longstanding image of U.S. imperialism, the canal remains to be central to the U.S. economic system.

Mr. Trump has repeated different falsehoods concerning the canal, and threatened to retake it except america is handled extra “pretty.” He mentioned that 38,000 People died constructing it; historians say it was hundreds of U.S. residents, and that the 1000’s of people that died have been from Central America, the Caribbean or Colombia.

Even when america have been to regain management of the canal — a tough prospect as a result of the treaties handing it over have been ratified by the U.S. Senate — it will not change the truth that a Chinese language-owned firm controls the ports at both finish.

Mr. Trump additionally known as the charges Panama expenses to transit the canal “exorbitant.” In reality, these charges are decrease than for comparable transport chokepoints, although they’ve elevated as a result of drought has lowered the water degree within the canal and the variety of ships that may go by.

Judah Levine, the pinnacle of analysis at Freightos, a logistics firm, mentioned that Panama expenses container ships about $100,000 to $300,000 per transit — only a fraction of what the Suez Canal expenses, even earlier than the latest transport disruptions within the Crimson Sea.

“For container vessels, when these prices are unfold throughout the 1000’s of containers being carried on every ship, the price to importers/exporters isn’t terribly vital,” he mentioned in an announcement.

A Trump spokeswoman mentioned this week that as a result of america is the largest consumer of the canal, the rise in charges hits its ships probably the most.

Lisa Friedman, Guillermo Hernandez Martinez and Carlos Prieto contributed reporting.

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