The Panama Canal is an international waterway in Panama, connecting the Atlantic Ocean to the Pacific Ocean. While the United States played a significant role in the canal’s construction and operation, the question of whether the US can “take back” the canal is complex.

The Panama Canal was built by the United States between 1904 and 1914, and it was operated by the US until December 31, 1999. On that date, Panama gained full control of the canal, in accordance with the Torrijos-Carter Treaties signed in 1977.

These treaties provided for the transfer of ownership of the canal from the US to Panama by the end of 1999. In return, the US received certain guarantees, including the right to defend the canal against any threat to its neutrality.

Given the terms of the Torrijos-Carter Treaties and the fact that Panama has exercised sovereignty over the canal since 2000, it is unlikely that the US could “take back” the canal. Any attempt to do so would likely be met with strong opposition from Panama and the international community.

While the US played a significant role in the construction and operation of the Panama Canal, the canal is now under Panamanian control, and would be a difficult mission for the US to regain control of it.

When the US controlled the Panama Canal, it collected tolls from vessels passing through. In 1999, the year the canal was transferred to Panama, the US collected around $400 million in tolls. However, the US also incurred significant expenses for maintaining and operating the canal.

After the transfer, Panama took over the responsibility of managing and operating the canal, including collecting tolls. According to various reports, the Panama Canal Authority generates around $2 billion to $3 billion in annual revenue from tolls.

It’s difficult to estimate the exact amount of money the US “lost” per year after giving the canal to Panama, as the financial aspects of the transfer were complex and involved various factors. However, it’s clear that the US no longer collects tolls from the canal, and Panama has taken over the responsibility of managing and operating this vital waterway.

However, not all countries pay equal amounts to use the Panama Canal. The tolls for using the canal are calculated based on the type of vessel, its size, and the type of cargo it carries.

The Panama Canal Authority (ACP) sets the tolls, which are based on many different factors including Vessel types, Vessel size, and cargo types, and other considerations.

Under the Torrijos-Carter Treaties, the United States and Panama agreed on certain provisions regarding the use of the Panama Canal.

While the US does not have completely “free” use of the canal, it does have certain guarantees and benefits:

All countries pay tolls to use the canal. However, the tolls are set by the Panama Canal Authority, and the US has no special exemptions or discounts.

The US has priority for the transit of its vessels through the canal, but only in times of war or emergency.

The US has the right to defend the canal against any threat to its neutrality, but this does not imply a right to free use.

The US, like other countries, can use the canal for commercial purposes, but it must comply with the canal’s regulations and pay the applicable tolls.

The US under the treaty is required to comply with the canal’s regulations, pay tolls, and respect the sovereignty of Panama.

The Panama Canal’s construction cost was approximately $350 million to $400 million, which is around $8 billion to $9 billion in today’s dollars, adjusted for inflation.

The treaties were the result of negotiations between US President Jimmy Carter and Panamanian leader Omar Torrijos.

The reasons behind the treaty were multifaceted: mainly Panamanian Sovereignty.The treaty recognized Panama’s sovereignty over its territory, including the canal area ¹.

The treaty also guaranteed the canal’s neutrality, ensuring it would remain open to all nations and the treaty marked a significant shift in US-Panama relations, as the US acknowledged Panama’s growing nationalistic sentiments and desire for control over the canal.

The treaty was also seen as a gesture of goodwill by the US, aiming to improve relations with Latin American countries and demonstrate its commitment to regional cooperation.

Was it a good deal for the US? That depends on how one looks at it. Economically the answer would be a resounding “no”. Considering the United States initial investment of nearly $500 to complete the canal which equals out to close to $20 billion today means the project was one of the largest public investments of its time and produced significant returns for the United States. In 2024, the canal’s revenue stood at $5 billion.

President Trump believes treaties made between the United States and Panama have been broken with China’s growing involvement in the canal. The President has declared that we gave the canal to Panama and not to China. China has denied that it is in any way controlling the Canal.

“The accusations that China is running the canal are unfounded,” Ricaurte Vasquez Moralez, the head of the Panama Canal Authority, recently told the Wall Street Journal

Panama’s President Jose Raul Mulino has also denied the presence of Chinese forces. “There are no Chinese soldiers in the canal, for the love of God,” he said in December 2024. Wall Street Journal.

It would be a huge benefit to the U.S. if we did own the Panama Canal, however we did, and we gave it up. Getting it back would be a truce breaker and who knows what the results would be.