Trump and the Panama Canal: Why He Should Invoke the Monroe Doctrine

President-elect Trump set off a firestorm recently when he suggested that the United States might retake the Panama Canal. Trump began by claiming that the fees Panama was charging US shippers for using the Canal were “ridiculous” and “highly unfair,” but he swiftly raised the stakes by saying that if Panama did not follow the spirit of the 1977 agreement under which the US had ceded the Canal, “then we will demand that the Panama Canal be returned to the United States.”  “We will never, never let it fall into the wrong hands,” Trump said. Panamanian President José Raúl Mulino responded, “Every square meter of the Panama Canal and its adjacent area belongs to Panama and will continue to do so. The sovereignty and independence of our country aren’t negotiable.” Mulino expressly repudiated any suggestion that China or any other foreign power controlled the Canal: “The Canal has no control, direct or indirect, neither from China, nor from the European community, nor from the United States or any other power.”

Trump clearly intended to do more than merely complain about the fee structure that Panama imposes on US shippers. He was undoubtedly aiming at China, which in recent years has sought to fashion a hold on the Canal – a scenario that Trump regards as a disturbing threat to US national security. Indeed, Trump’s warning may have carried an even deeper message, implicitly suggesting that his Administration would consider reviving the Monroe Doctrine. In short, Trump’s statements may convey powerful signals about his overall strategic intentions, both in this hemisphere and globally.

The Threat Posed by China’s Engagement in the Canal Area

Trump is by no means alone in considering Chinese penetration of Panama a security threat. American military leaders have raised alarm over the surge in Chinese-owned or controlled ports in Latin America and the Caribbean, including the Canal and its adjacent territory. According to the US Southern Command, Chinese companies have been constructing at least 40 ports on both sides of the Canal in places such as Ensenada, Manzanilla, Lázaro Cardenas, and Veracruz in Mexico.  Such ports might eventually be used to host Chinese warships. In Panama, a Chinese company operates the two main ports adjacent to the Canal: Balboa on the Pacific coast and Cristóbal on the Caribbean (Atlantic) side. (The contract, originally made in 1997, was extended for 25 years in 2021.) Nor does China’s penetration of Panama stop with those two strategically sensitive ports. According to one Panamanian author, “[b]eginning with the control of the main Pacific port since the 1990s, the port of Balboa, the PRC has managed to establish its presence in Panama by subsequently awarding a Chinese consortium the project of a fourth bridge over the Canal, the construction by a Chinese company of the country’s leading convention center, and the construction of a cruise terminal, all in that symbolic area [surrounding the Canal] of Panamanian territory.”  

In 2022, the Commander of the US Southern Command, General Laura Richardson, pointed out the military dangers to the US from China’s growing presence in Panama. “Flying along the Panama Canal and looking at all the state-owned enterprises from the PRC on each side of the Panama Canal, I worry … they look like civilian companies or state-owned enterprises that could be used for dual [i.e., military as well as civilian] use.”  “[They] could be quickly changed over to a military capability if they needed that, too, so as I look at this, the investment that they make … I think we should be concerned.”

General Richardson’s concerns about PRC influence over the Canal were not the only occasion on which our military leaders have expressed such worries. A 2022 study by the Congressional Research Service (CRS), entitled China’s Engagement with Latin America and the Caribbean, reported:

The U.S. Southern Command (SOUTHCOM) has voiced strong concerns in recent years about China’s activities in LAC [Latin America and the Caribbean]. Its 2022 posture statement asserted that the PRC and its state-owned enterprises continued to target, recruit, and bribe officials at all levels to expand their economic, political, and military influence in LAC. According to SOUTHCOM, PRC activities have included “investments in strategic infrastructure, systematic technology and intellectual property theft, disinformation and propaganda campaigns, and malicious cyber activity—all with the goal of expanding long-term access and influence in this hemisphere.”

The military reiterated its concerns in 2023. According to a CRS report for that year:

[(SOUTHCOM's)] 2023 posture statement asserted that the PRC has “the capability and intent to eschew international norms, advance its brand of authoritarianism, and amass power and influence at the expense of the existing and emerging democracies in our hemisphere.” According to SOUTHCOM, the PRC is investing in critical infrastructure, including deep-water ports, cyber, and space facilities which “can have a potential dual use for malign commercial and military activities.”

China’s current interest in Panama goes back at least to 2017, when then-Panamanian President Juan Carlos Varela (surprisingly) derecognized Taiwan and established diplomatic relations with the PRC. (There are unproven allegations that Varela accepted a bribe of about $142 million from the PRC.) A spate of agreements relating to strategic, economic, and technical co-operation between China and Panama swiftly followed. Panama became the first Latin American nation to join China’s Belt and Road Initiative (BRI), the massive PRC initiative begun in 2013 by which China has disbursed tens of billions of dollars on infrastructure projects in Latin America and across the world.  

The Significance of the Canal to the US

The Canal, through which about five percent of global trade passes, is crucial to the US economy and its national security. Although the Canal is vital to trade between Latin America, Europe and Asia, the US easily remains the chief user of the Canal, followed distantly by China and Japan.  About 40 percent of all US container traffic travels through the Canal, and the US is either the origin or destination country of 74 percent of the cargo shipped through it.  

Effective Chinese control of the Canal, even in peacetime, would be seriously detrimental to the US defense posture and threatening to our economy.  Militarily, the US Navy continues to use the Canal to move its ships between the Atlantic and Pacific Oceans.  These ships include submarines and even, occasionally, aircraft carriers. There are also fears that China could embed surveillance technology within the Canal’s infrastructure, permitting it to engage in espionage against US naval and commercial operations and to garner critical information about US logistics and military movements.

Moreover, China is not the only threat to US interests in the Canal. Nearby Venezuela, under a socialist dictatorship that aligns itself with Iran, is building a fleet of small “missile boats” that could harass traffic passing through or near the Canal and that our Navy could find hard to suppress.

Trump’s concerns, albeit expressed in bellicose terms, are justified. His critics myopically fail to see the whole picture, ignoring the repeated concerns voiced by our military about China’s deepening engagement in the region.

But that leaves the question: What should Trump do to push China out of Panama? Using military force to retake the Canal is an extreme (but possible) option. Other ways that do not involve using force – such as encouraging Panama to restrict Chinese investment or expropriate Chinese holdings there – should also be on the table. But we wish to clarify here that President Trump has the legal authority to pursue American foreign policy interests toward the Canal, even if that means returning an American presence, suspending or terminating the Canal treaties, or even re-asserting U.S. sovereignty.

The Torrijos-Carter Treaties

The legal framework currently governing the Panama Canal was established by a pair of treaties negotiated between President Jimmy Carter and Panamanian leader Colonel Omar Torrijos and ratified in 1978 by the US Senate. The first treaty, The Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, provides in Article IV for the permanent “neutrality” of the Canal. The second, The Panama Canal Treaty, states that the US-owned Panama Canal Zone would cease to exist on October 1, 1979, and that the Canal itself would be turned over to Panama on December 31, 1999. Since then, Panama has controlled the Canal.

Both treaties include clauses regarding the defense of the Canal. The Neutrality Treaty states “[t]he United States and the Republic of Panama agree to maintain the regime of neutrality established in this Treaty, which shall be maintained in order that the Canal shall remain permanently neutral.” The Panama Canal Treaty permits armed intervention by the United States in certain circumstances to protect the Canal. Article IV, 1 states that “[t]he United States and the Republic of Panama commit themselves to protect and defend the Panama Canal. Each Party shall act, in accordance with its constitutional processes, to meet the danger resulting from an armed attack or other actions which threaten the security of the Panama Canal or of ships transiting it” (emphasis added). A reservation to that treaty, on which the Senate conditioned its advice and consent, and which was incorporated into the 1978 Instruments of Ratification, refers to “action[s] taken by the United States of America in the exercise of its rights to assure that the Panama Canal shall remain open, neutral, secure, and accessible, pursuant to [the two Canal treaties].” It is reasonable to read these provisions as establishing the right of the United States to defend the Canal against any threat, including but not limited to an “armed attack,” to the Canal’s neutrality or security.

By permitting extensive Chinese penetration of the territory surrounding the Canal and of its economy and society, is Panama compromising the security and neutrality of the Canal? Panama vehemently denies any such suggestion. But on the US side, the interpretation of treaty clauses, at least in the first instance, is the President's constitutional responsibility.  President Trump might find that the treaties permit the United States to take steps to prevent the Canal’s neutrality from being compromised. And those steps could conceivably include military measures.

Of relevance to the Canal treaties, some forty nations are parties to a protocol to the Neutrality Treaty, under which they have committed themselves to maintain the Canal’s neutrality. Despite being the second largest user of the Canal, China is not a party to this protocol and thus is not legally committed to the Canal’s neutrality. China’s purported justification for this stance is that Taiwan is a party to the protocol and that it will, therefore, not be a co-party to it. But China is a party to about twenty other treaties that also include Taiwan. China’s disingenuous refusal to join the protocol strongly suggests that it will not respect the Canal’s neutrality.  

The Treaty Termination Power of the President

Suppose that Panama’s actions are not currently endangering the Canal’s neutrality. President Trump has the constitutional authority to take a more radical approach. He could instead terminate the treaties with Panama and re-assert American sovereignty over the Canal Zone.

Article II of the Constitution, which establishes the “executive” power of the federal government, sets out the treaty power. The President first negotiates the agreement, and after “two thirds of the Senators present” have given their advice and consent, the President then “makes” the treaty. The Constitution, however, contains no provision concerning the abrogation or termination of treaties.  The absence of any clear language has occasioned longstanding controversies over where the power to terminate treaties lies. Constitutional structure, history, and tradition firmly establish that the unilateral power to terminate treaties best rests with the executive branch. Wielding this authority, President Trump could terminate the two 1978 treaties with Panama without the need for prior authorization from the Senate or Congress, which would allow the United States to re-assert its sovereignty over the Canal Zone.

First, the text and origins of the Article II treaty clause support the view that President Trump need not return to the Senate or Congress for permission to terminate the Canal treaties. The Constitution often sets out a process for action without describing the way to undo the action. Article I describes the procedure for enacting a statute in exquisite detail, but it does not mention how to repeal one. Article V describes the need for two-thirds of the Congress and three-quarters of the states to amend the Constitution but does not describe how to reverse one. In these cases, our system has assumed that Congress must pass a new law to repeal an old law, and a new constitutional amendment is needed to undo an earlier one (as occurred only once, with Prohibition). Some – including Alexander Hamilton, the Founding’s greatest proponent of executive power – have thought that this rule requires Presidents to terminate treaties with the consent of the Senate or Congress.

But matters are very different with the authorities located in the executive branch. Generally, successful executives will act “at a stroke,” in Machiavelli’s words, or, as Hamilton put it, to conduct themselves with “decision, activity, secrecy, and dispatch.” This means that Presidents, to enjoy “energy in the executive,” must have the ability to act swiftly, which can involve quickly reversing the decisions of their predecessors. It stands to reason that Presidents, as the bearer of all the executive power of the federal government, must be able to repeal any action undertaken through Article II, such as the making of a treaty, the execution of a law, or a military decision. Such energy in the executive, Hamilton wrote in Federalist 70, is necessary for “the protection of the community against foreign attacks” and “is not less essential to the steady administration of the laws.”

Critics of presidential power to terminate treaties would point to the Senate’s advice and consent power as a limit. But the advice and consent power acts only as a narrow exception from the President’s general executive power, which would have allowed him to make treaties alone otherwise. As Hamilton argued during the fight over the Neutrality Proclamation, such exceptions from Article II’s general vesting of the executive power in the President were to be read narrowly. While it might condition the making of a treaty, the role of advice and consent is not to be interpreted as similarly limiting the President’s executive authority to terminate a treaty.

The closest parallel is the Appointments Clause. Just as with treaties, Article II describes how to appoint an office but not how to fire one.  The Appointments Clause requires the President first to nominate a judge or principal officer and, after the Senate has given its advice and consent, to make the appointment. But the courts have refused to read the advice and consent power as a similar constraint on removing officers. Instead, Article II is understood to give the President the authority to fire any executive branch officer who has authority under federal law. Just as Presidents possess an unconditioned executive power to fire federal officers, so too does the text implicitly grant them the authority to terminate treaties.

Founding history confirms our reading of the text. The Framers modeled the constitutional office of the presidency in reaction to the eighteenth-century English monarchy. As made clear by Sir William Blackstone’s monumental Commentaries on the Laws of England (with which nearly all American lawyers of the period were intimately familiar), the “executive power,” which the unwritten English constitution vested in the monarch, included the power to make, manage, and terminate treaties.  As we have noted, the Framers decided to split the monarch’s power over treaties by dividing responsibility for treaty formation between the President and the Senate.  But they left the remainder of the executive’s treaty powers intact, including the executive power to interpret and terminate treaties. These remaining elements of the treaty powers remained in the executive branch due to the Vesting Clause of Article II, which confers the “executive power” on the President. And, as the Supreme Court noted in Seila Law LLC v. CFPB (2020), “the entire ‘executive Power’ belongs to the President alone.”

Second, ample Supreme Court precedent recognizes that the President has sole constitutional responsibility to conduct all diplomacy for the United States. In the 2003 Garamendi case, the Supreme Court affirmed that the President must “speak for the Nation with one voice in dealing with other governments.” And as long ago as 1839, the Supreme Court declared in In re Hennen that “[a]s the executive magistrate of the country, [the President] is the only functionary entrusted with the foreign relations of the nation.” He has, moreover, the lead constitutional role in framing the United States foreign policy, in protecting national security, and in projecting the Nation’s military force throughout the world. In these capacities, the President must manage the treaty relations we have formed with other nations. That power must include the power to sever such relations when the President concludes it is in our national interest. As the Justice Department’s Office of Legal Counsel opined under President Bill Clinton in 1996, “[i]t belongs exclusively to the President to interpret and execute treaties,” and this power “necessarily includes the power to determine whether, and how far, the treaty remains in force.” Part of conducting diplomacy naturally includes the power to interpret and, if necessary, to terminate international agreements.

Third, substantial practice shows that Presidents have often terminated treaties unilaterally, without prior consent from the Senate or Congress (though they may have received express approval subsequently for those actions). This general practice suggests that the political branches of our government have accepted presidential claims to authority in this matter. A prominent example is President Carter’s abrogation of the United States’ mutual defense treaty with Taiwan. In Goldwater v. Carter (1979), Senator Barry Goldwater challenged President Carter’s unilateral decision to terminate the U.S.’s mutual defense treaty with Taiwan because we normalized diplomatic relations with Communist China.  The Court of Appeals affirmed Carter’s authority. Four Supreme Court Justices agreed that the President could terminate treaties.  Another plurality of four other Justices found that the case posed a “political question” beyond the judiciary's power to decide; a fifth Justice found that the dispute was not yet ripe for decision. The latter set of Justices reasoned that the Constitution did not provide the courts with a legal rule of decision to be applied to treaty termination: it was silent on that matter. Hence, the plurality said, it was for the elected political branches of the government to resolve the matter between themselves.  

Fourth, the Executive branch has repeatedly affirmed that the President possesses treaty termination power. In 2018, during the first Trump Administration, the Office of Legal Counsel of the U.S. Department of Justice echoed earlier opinions by declaring: “[i]n view of the[] historical examples of presidential action, combined with what has usually been congressional acquiescence, there can no longer be serious doubt that the President may terminate a treaty in accordance with its terms." OLC reaffirmed that view in 2020. Those two OLC opinions are not precisely on point here because they considered treaties that included withdrawal provisions, which the Panama Canal treaties do not. However, the 2020 OLC opinion relies upon a 2001 OLC opinion (which was signed by one of us) that recognized the President’s “responsibility for treaty interpretation and enforcement, and the authority to place the United States in breach of a treaty or even to terminate it, should the President find that advisable.”

Although Goldwater would leave any dispute over Trump’s constitutional authority to abrogate the Panama Canal treaties for the President and Congress to fight out, that does not mean that Congress is powerless. On the contrary, Congress can use its constitutional power over spending to check presidential actions with which it disagrees, provided it does not violate the separation of powers. Congress could bar the use of any appropriated funds to retake the Canal or otherwise interfere with the current treaty-based arrangements governing it. Where there is no Congressional appropriation for a given purpose, there is no money for the Executive to spend. Such a Congressional spending curb would, of course, be subject to a presidential veto, but it might be included as part of a “veto-proof” appropriation for other essential government activities. In addition to appropriations, Congress could use its oversight and investigatory powers and even withhold cooperation in other areas to oppose a presidential decision to return to the Canal Zone.

Towards a New Monroe Doctrine?

But as Congress reacts to any decision to re-assert American rights toward the Panama Canal, it should realize that President Trump is returning to one of the great principles of American foreign policy. American strategy has always begun with homeland defense, followed closely by our imperative to control the Western Hemisphere, as recognized in the Monroe Doctrine.  Before the United States begins to consider other goals, such as keeping Europe and Asia out of the hands of a single power or patrolling the Atlantic and Pacific Oceans, it must re-assert its predominance in our neighborhood. One of the many failures of the Biden administration’s foreign policy has been to cede economic and political influence throughout Latin America to China. By re-asserting American rights in the Panama Canal, Trump can send an important message that the United States will no longer tolerate Chinese expansion to the nations closest to home.

John Yoo is a distinguished visiting professor at the School of Civic Leadership and a senior research fellow at the Civitas Institute at the University of Texas at Austin, the Heller Professor of Law at the University of California, Berkeley, and a nonresident senior fellow at the American Enterprise Institute.

Robert Delahunty is a Washington Fellow of the Claremont Institute Center for the American Way of Life.