Panama Canal
Strategic Significance and Treaty Framework
The Panama Canal is an 82-kilometre artificial waterway connecting the Atlantic Ocean (via the Caribbean Sea) and the Pacific Ocean through the Isthmus of Panama. It handles approximately 5% of global maritime trade, serving 140-180 ships per day, and is critical for US East Coast-West Coast shipping, Asian exports to the US East Coast, and LNG/LPG trade routes. The Torrijos-Carter Treaties (signed September 7, 1977, by US President Jimmy Carter and Panamanian leader Omar Torrijos) established the framework for US handover of the canal to Panama. The Panama Canal Treaty transferred operational control to Panama by December 31, 1999, while the Neutrality Treaty guaranteed the canal's permanent neutrality and equal access for vessels of all nations. The US Senate ratified both treaties in 1978; they came into force on October 1, 1979.
- Panama Canal completed: 1914 (US-built); transferred to Panama: December 31, 1999
- Neutrality Treaty provision: allows the US to use military force to defend the canal's neutrality — a clause Trump has cited to justify asserting US security interests
- Canal capacity: expanded in 2016 with the addition of new locks (Neo-Panamax locks) accommodating vessels up to 14,000 TEU
- Annual revenue to Panama: approximately $4 billion (canal tolls)
- Two key ports: Balboa (Pacific entrance, near Panama City) and Cristobal (Atlantic entrance, near Colón)
● Tracked since February 24, 2026 · last seen March 07, 2026 · updates as the daily brief publishes