Senate Examines Chinese Influence and Challenges Facing the Panama Canal

The hearing highlights concerns over rising Chinese involvement, treaty implications, and the canal's operational and economic pressures.

The Senate Commerce Committee is investigating China's growing presence in Panama, including state-owned companies managing key ports and infrastructure projects near the Panama Canal.
Experts raised concerns about potential violations of the 1977 Panama Canal Treaty, which ensures neutrality, equitable fees, and exclusive Panamanian control of the canal.
Drought conditions in 2024 significantly reduced the canal's capacity, and experts warn that without major infrastructure upgrades, capacity could drop by 50% by 2050.
U.S. officials criticized Panama's no-bid contracts favoring Chinese firms and called for greater support for U.S. companies to compete for canal-related projects.
The canal is vital to U.S. trade, handling 40% of U.S. container traffic annually, but rising fees and operational challenges are straining its reliability and economic impact.