Will Trump take back the Panama Canal?

The key issue is that the canal’s sovereignty is not something the U.S. can simply “take back” by force of rhetoric or even by executive preference. Under the Torrijos-Carter framework, Panama controls the canal, the United States withdrew its military presence, and any genuine reversal would require either a negotiated treaty change or an extraordinary coercive intervention that would be politically, legally, and diplomatically explosive. Nothing in the recent reporting suggests Panama is willing to hand over control, and the administration’s own actions have centered on access, security cooperation, and countering Chinese influence rather than pursuing a formal transfer of ownership.

Trump’s repeated statements do keep the issue alive, and that matters because it creates optionality for more aggressive demands, sanctions, or security conditioning. But the actual policy moves described so far cut the other way: Panama has already made concessions on China-related issues, expanded cooperation with the U.S., and resisted direct pressure on fees and sovereignty. That pattern is consistent with Trump extracting concessions without needing the maximal outcome. In other words, the most likely result is more U.S. influence over canal operations and regional security, not a literal reclaiming of the canal.

Compared with the current market price of 21% yes, my estimate is meaningfully lower. The market seems to be assigning too much weight to Trump’s rhetoric and to the possibility of dramatic, low-probability foreign policy moves, while underweighting the institutional and diplomatic barriers that make actual takeover extremely unlikely. Unless the definition of “take back” is interpreted unusually loosely, this looks overpriced on the yes side.