With the Panama Canal back in Washington’s spotlight, two neighbors are seizing their moment. For Panama and Colombia, global rivalry is not just risk—it’s leverage, a chance to rebuild logistics, reframe diplomacy, and write their own rules of engagement.
A Canal Under Pressure, and Full of Potential
Panama’s canal has always drawn outsized attention. But when Donald Trump vowed to “reclaim” it during a campaign speech, the rhetoric echoed louder than usual. Panama City buzzed with high-level visits, lobbying efforts, and diplomatic maneuvering—anxious on the surface, but strategic underneath. For leaders at the canal authority, U.S. attention isn’t a threat—it’s an opportunity to modernize, diversify, and protect one of Latin America’s most vital trade corridors.
The to-do list is already underway. A proposed $1.5 billion Río Indio reservoir would help solve a deepening water crisis that forces draft restrictions during dry spells. A pipeline project aims to shuttle liquefied petroleum gas and other energy products along the canal’s western edge. And upgraded port operations at both ends of the canal could create a seamless transshipment network in the Americas.
Private players see the signal. Just as Washington’s tough talk intensified this spring, shipping giant Maersk quietly purchased the rail line connecting Panama’s Atlantic and Pacific coasts—an unmistakable vote of confidence. And with shippers rushing to beat possible tariffs, the canal recently delivered $2.5 billion to the national treasury, a budget windfall that underscores just how central it remains to global logistics.
The canal isn’t the pawn it once was. Since the expansion in 2016 added a third lane, it has been governed with commercial discipline and nationalist pride. Still, one critique from Trump found some local resonance: China’s rising economic footprint. In 2017, Panama officially recognized Beijing over Taipei and joined the Belt and Road Initiative. Chinese firms poured into logistics, infrastructure, and energy bids—including port operations at both canal mouths.
But the tide is shifting again. A Hong Kong consortium is selling stakes in Balboa and Cristóbal ports to a U.S.-backed group, Beijing is pushing back, and Panama’s comptroller has urged a review of past extensions. The likely result? Less Chinese sway, more U.S. scrutiny, and an arbitration battle that could shape Panama’s reputation for decades.
Playing the Strait Game: Neutral, but Not Passive
Panama’s president, José Raúl Mulino, knows the line he’s walking. Pull too hard toward Washington, and he risks undermining Panama’s role as a global logistics hub. Tilt too far toward Beijing, and he loses vital political cover. So Mulino is trying something more nimble—what analysts call the “Singapore posture.” Stay open. Stay useful. Don’t pick a side if you can play both.
Already, he’s taken steps to reset the balance. Panama formally withdrew from China’s Belt and Road club, inked new security agreements with the U.S., and hosted joint military drills. But Chinese shipping still fuels the canal’s second-largest revenue stream, and Panama’s long-rooted Chinese community is embedded in its economy.
The strategy is clear: become the Western Hemisphere’s version of the Strait of Malacca—a rules-based, reliable corridor where ships pass regardless of the politics behind their flags. Mulino will need more than speeches to pull it off. He must rebuild trust at home, repair fiscal scars from the pandemic, and avoid social flashpoints that could undo investor confidence overnight.
After years of unrest—from anti-inflation marches to a copper mine revolt—Panama’s government knows the margin for error is thin. But the prize is clear: if Mulino can deliver water security, port resilience, and neighborhood-level improvements, he may turn great-power scrutiny into lasting leverage.
Colombia’s Parallel Route to Global Relevance
Colombia, meanwhile, is watching—and ready to move. With ports on two oceans and a location just south of the canal, it stands to benefit every time Panama stumbles or fills. But it also has a chance to go beyond opportunism.
On the Caribbean side, Cartagena and Barranquilla already function as world-class transshipment hubs. Buenaventura, on the Pacific, still struggles with insecurity and weak infrastructure—but its location is strategic, especially as Asian firms seek faster access to U.S. markets through nearshoring.
Colombia’s real asset may be its ability to connect the coast to the interior. A modernized Magdalena River system, better highways, and a digital customs backbone could turn the country into a dry canal—a logistics corridor that complements Panama rather than competing with it. Add in growing clean-energy infrastructure, a skilled services sector, and fintech tools that knit the diaspora to regional exports, and Colombia has the makings of a new supply-chain node.
The diplomatic approach matters too. If Colombia signals neutrality, embraces transparency in tenders, and builds investor confidence with clear rules, it can attract partners from both East and West without selling out its sovereignty. Coordinated port planning with Panama, joint marketing of transshipment options, and harmonized regulations could make the region not just a place to pass through—but a place to bet on.
EFE
A Blueprint for Competence, Not Compliance
This isn’t a Cold War sequel. It’s a logistics renaissance. The U.S. and China will continue competing for influence, but Latin American countries like Panama and Colombia don’t have to be pawns. They can be players.
For Panama, the blueprint starts with water security, expands with diversified revenue through energy and carbon credits, and wins credibility through rule-based neutrality. For Colombia, it’s about connecting the Pacific and Atlantic coasts to the interior, modernizing its ports, and turning regional logistics into a national asset.
The shared thread is competence. Not alignment. Not ideology. Just reliability: functional infrastructure, clear contracts, responsive governance.
In today’s supply-chain world, that’s what earns trust. If Panama and Colombia can offer predictable passage, steady leadership, and services that match the scale of their ambitions, they won’t just adapt to global rivalry—they’ll shape it.
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Credits: Reporting and data cited from Panama Canal Authority, Wired, A.P. Moller-Maersk, Esteban Amaro, University of South Florida, and EFE.