Trump says that America is being treated unfairly at the Panama Canal and that China is running the canal. These are, of course, two separate issues. China could be running the canal, and the U.S. might still be treated fairly. And the U.S. could be treated unfairly even if China is not running the canal. But whether Trump meant one or the other or both, he has not presented information to back up what he says.
His unfairness claim might mean that Panama is discriminating against the U.S. vessels in charges and service. Or Trump might mean that even though there is no discrimination, the fees are too high for all ships. We, of course, can’t know what solutions are possible until we know what the problem, if any, is. Not surprisingly, other than his assertions, Trump has not explained how we are being screwed. I guess the implication is that if we ran the canal, our ships would pay less, but of course, so far that is only a conjecture. And thus we enter our new foreign policy.
Similarly, the assertion that China is running the canal could mean several things. Trump could be saying that Chinese nationals are manning the locks and piloting the vessels. There appears to be no evidence of that. Perhaps Trump means that the Chinese are telling the Panamanians how to operate the canal. Again, no proof of that. However, non-Trump sources indicate that the Chinese have a significant presence in the ports on both ends of the canal. If that presents issues for the United States, it is much broader than just Panama. The Panamanian ports are part of a widespread, worldwide Chinese foreign policy that has existed for more than a decade.
China has invested in or built many, many infrastructure projects around the world. At first they concentrated on the old Silk Road, but they are now involved in building roads, ports, energy plants, rails, and the like in almost every African country, some European countries (Italy, e.g.), and many Latin American nations, including Panama. Case in point: in the last several months, a new $1.3 billion mega-port, built buy China, was dedicated in Peru.
In China’s global Belt and Road Initiative, state-run Chinese Banks have made huge loans to countries, and Chinese construction companies have won many, perhaps most, of the contracts to do the building. China lends money, and then gets much of it back almost immediately because Chinese companies are hired. And they get more money back in the longer term through loan repayments.
America has no comparable initiative. If the Chinese BRI is a national security concern for us, we have had no response other than larger and larger defense spending. (Our defense budget is larger than the next nine countries [including China’s] combined.) Perhaps our security, and the world’s economy, would be better served if some of the money spent on defense contracting went to constructing bridges and tunnels, dredging harbors and building piers, and laying rails, gravel, and asphalt. We are, however, not likely to have any fundamental reconsideration of our defense spending. There are many more areas of “wokeness” in this country than the ones conservatives use as a punching bag, and defense priorities fall in that category. Neither right nor left are willing to question the defense budget. What a wise person said about one branch of the military in essence applies to all the armed services: “The navy recognizes no criticism as constructive except that which calls for the building of additional ships.”
Trump’s jejune rants about Panama are troubling. The suggestion of using military force to take back the canal is worrisome. Bluster can sometimes lead to unwanted, unplanned action. For example, in the 1960s and 1970s the U.S. anticipated that without the Panama Canal Treaties, guerilla attacks on the canal would multiply. If we seize the canal, won’t such warfare emerge? And seizing the canal does not address the Chinese presence in the port cities. Is Trump suggesting armed force to remove the Chinese from their investments and what they have built? That potential aggression, that act of war should scare everyone.
If, however, Trump would broaden his perspective from the Panama Canal to a coherent American response to the BRI, he would be truly advancing American interests. This is unlikely. The BRI was well underway in his first term, and he ignored it. Nothing indicates that he has thought much about it since. Furthermore, grappling with the Chinese actions could cast doubt on Trump tariff policies. The U.S. has been the chief trading partner of Latin America. That is about to change, if it has not already. Trade between China and Central and South America has multiplied dramatically, and America is destined for second place in trade with our southern neighbors for the long term. The change in trading patterns partly stems from the new Latin American ties China has built with the BRI, which have led to China signing free trade agreements with South American counties. The absence of tariffs has led to more trade for both China and Latin America and has given a greater Chinese presence in the Americas. Meanwhile, our proposed foreign policy will apparently rely on increased worldwide tariffs without the equivalent of the Belt and Road Initiative. Why is Trump or anyone surprised that China’s influence in Latin America is increasing while ours wanes?
