Senators raise concern about Chinese influence on Panama Canal operations

By David Shepardson and Marianna Parraga

A bipartisan group of U.S. senators on Tuesday expressed alarm at China's influence on the Panama Canal, which President Donald Trump has vowed the United States would take back.

"Chinese companies are building a bridge across the canal – at a slow pace so as to take nearly a decade – and control container ports at either end," Senate Commerce Committee chair Ted Cruz said at a hearing on the canal's role in U.S. trade and national security.

"The partially-completed bridge gives China the ability to block the canal without warning, and the ports give China ready observation posts to time that action. This situation poses acute risks to U.S. national security," he added.

More than 40% of U.S. container traffic, valued at roughly $270 billion annually, transits the Panama Canal, making up over two-thirds of vessels passing each day through the world's second-busiest interoceanic waterway.

Federal Maritime Commission Chair Louis Sola said the agency "will continue to monitor the canal's pricing practices and consider broad reviews of Panama's maritime sector," and can impose fines and restrictions on Panamanian-flag vessels entering U.S. ports.

Panama has one of the world's largest registries for vessels, giving its flag to more than 8,000 ships.

Senator Maria Cantwell, the top Democrat on the committee, said the U.S. and Panama should work "together to boost port and Canal infrastructure to lower costs and ensure reliability of the Canal."

She asked for a classified briefing for the committee on foreign adversary threats to the canal and plans to take a group of senators to the canal later this year. "I am concerned about the Chinese-owned ports in Panama and their proximity to the Canal," Cantwell said.

Trump has given no details on when or how he intends to reclaim the canal, which is the sovereign territory of an ally. He has refused to rule out use of military force, drawing criticism from Washington's Latin American friends and foes alike.

George Mason University law professor Eugene Kontorovich told the hearing a neutrality treaty signed when the U.S. transferred the canal to Panama gives both sides "the right to resort to use armed force" to enforce provisions. However, "armed force should never be the first recourse for any kind of international dispute," he added.

Panama's president, Jose Raul Mulino, said last week that Panama has administered the canal responsibly for world trade, including for the U.S., and that it "is and will continue to be Panamanian."