The Panama canal is of huge economic and strategic importance, being one of the world’s major trade routes.
Trump has recently hinted at the use of military force to regain control of the canal, citing economic security.
Trump has stated that the U.S. should never have given control of the Panama Canal to Panama in 1999. The Panama Canal is now controlled by the Panama Canal Authority, but foreign investors, including Chinese companies, have acquired stakes in its port operations.
Trump has criticised transit fees and claims that China is now operating the canal.
President José Raúl Mulino has asserted that Panama’s sovereignty over the canal is non-negotiable, but acknowledges the U.S. strategic interest in the region.
The Nation-State is Still a Powerful Global Actor
Despite claims that globalisation has weakened the nation-state, the Panama Canal’s history and Trump’s comments show that powerful governments still play a decisive role in global affairs. The U.S. exerted its influence to construct and control the canal for much of the 20th century, demonstrating the strategic importance of military and economic power.
The fact that Chinese firms have acquired stakes in the Panama Canal’s operations exemplifies how economic power is shifting away from the U.S. Of course Chinese firms are closely allied with the Chinese State, so the Panama Canal is a case study in the shift of global power towards China.
As discussed in this analysis of globalisation and the nation-state, while globalisation has changed the way power operates, strong states like the U.S. continue to shape economic policies and geopolitical strategies. Trump’s suggestion that the U.S. could retake the canal by force reflects the enduring significance of national power in global politics.
Similarly, Panama’s firm stance on its sovereignty highlights how small nations can assert themselves in a globalised world. Despite its size, Panama has successfully resisted U.S. pressure and maintained control over its most valuable asset.
Applying the Optimist View of Globalisation…
Global optimists might argue that global trade trumps (no pun intended) all, and overt military conflict is unlikely….
Proponents of globalisation argue that it fosters economic growth, innovation, and international cooperation. The Panama Canal is a prime example of how global infrastructure projects can boost trade and development. Since taking full control in 1999, Panama has successfully managed the canal, increasing its economic benefits and strengthening its national identity.
As outlined in the optimist perspective on globalisation, global trade networks allow for economic interdependence, reducing the likelihood of conflict. While Trump’s rhetoric suggests a return to economic nationalism, the reality is that the U.S. and China are deeply interconnected through trade, making outright conflict over the canal unlikely.
Moreover, the expansion of the canal with new locks has facilitated larger trade volumes, benefiting multiple economies. This supports the idea that globalisation can be a win-win scenario where infrastructure investment and international commerce create prosperity rather than exploitation.
Relevance to Globalisation and Global Development
This discussion is relevant to the sociology of education because it demonstrates how globalisation shapes economic opportunities, social structures, and political power dynamics. As detailed in this resource on globalisation and global development, understanding global economic history is essential for students analysing contemporary issues in international relations, trade, and development.
The case of the Panama Canal offers a concrete example of how historical economic policies influence modern global politics, making it a valuable topic for sociological study.