The Peter Zeihan Podcast Series - Panama Boots China from the Canal || Peter Zeihan

Episode Date: March 6, 2026

Panama has taken control of the port facilities previously run by a Chinese company after the courts ruled the original contracts were secured through bribes. This move reaffirms U.S.–Panama relations, as a U.S. ally is now operating the ports.Join the Patreon here: https://www.patreon.com/PeterZeihanFull Newsletter: https://bit.ly/3P7ck3B

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Today is the 24th of February, and the news is that the government of Panama has just formally taken control of the series of ports that used to be run and owned by the Chinese. This is something that has been an irritant in U.S. Panamanian relations for a few years. Basically, the Chinese subsidized or shipping system and then go into places about infrastructure. there are a lot of people in American who feel this is a security risk. It really isn't. These facilities didn't have the ability to hold military assets of any meaningful size. But that doesn't mean that they're not strategic anyway, because the Panama Canal is the primary connection between the Pacific and the Atlantic. And unless you're in a really big ship,

that's just how you're going to get from A to B. And for cargo that is destined from the East Asian Rim to the U.S. East Coast, it pretty much all uses Panama. Anyway, the Trump. administration threw a bit of a fit shortly after it came into office, started legal proceedings within Panama. Last month, the Panamanian courts basically ruled that the Chinese bribed their way into getting the contract, which is absolutely true. And so therefore it was void. Today was the day that the Panamanian government took formal control of the facilities from the Chinese. The Chinese abitched and moaned and bitched and moaned. But at the end of the day, under legal consequences, they were shepherded out of the building,

and it is now under the operational control temporarily of a company called Marisk, which is based in Denmark, which is a country that despite all of the problems between the United States and Denmark over the Greenland issue, remains an ally. Fun, fun, fun. Anyway, the question is, what's next? China's entire position in the Western Hemisphere is based on one very stupid assumption

that the United States will actively keep the sea safe for Chinese shipping and allow the Chinese to establish whatever economic footprint they want in the Western Hemisphere. This is dumb, dumb, dumb, dumb, but it has always been the basis of all Chinese decision-making, the idea that we don't have a global navy. We just have a lot of little ships that are close. The Americans have a global navy, so it's up to the Americans in their global navy to allow us to penetrate into the wider world. There's always a stretch.

And this is a great example of showing how it all falls apart with nothing more than a little bit of legal action. The question now is what is the United States going to do with this? It's not that Panama isn't important on its own, but it's only one piece of a broader environment in the overall region. We've seen a military side of the strategy now with Venezuela. We're seeing basically a functional boycott on places like Cuba. But really, if you want to talk about American power projection in Western He, hemisphere, the Panama example is far more important. Because it's one thing to knock off a government you don't care about. It's another to get a government to do it for you, to reshape its policies

in your direction simply because you asked. Soft power is not dead, apparently not even in the Trump administration. But the presence of Marisk tells you that it's always easier to do it if you're not a dick about it. So future topics are absolutely going to be Mexico-centric because that's where the real money is in the American economic relationship in the hemisphere. But we're probably also going to see things in Ecuador, Peru, Argentina, and Brazil, all of which have for various reasons budded up to the Chinese in order to get the cash, whereas the United States is the strategic guarantor of everything that matters in the region. We're not there yet. The big problem that we're facing is that when the Trump administration came in, it gutted the National Security Agency,

or excuse me, the National Security Council, it gutted the State Department, and it winnowed down a lot of things in the Defense Department as well. And then the Commerce Department was not simply winnowed down. It was then given the task of enforcing the most complicated tariff regime in human history. We've now had over 6,000 tariff changes in the last year. And a lot of this is going to be based on diplomacy and economic activity. And there aren't. a lot of personnel in the United States to craft, to advise, and then ultimately to carry out the policy. So strong start on Panama. The question is how deep can this go and how much can it be replicated? As for the Chinese, their options are kind of limited here. They screamed,

they screamed, they screamed, but at the end of the day, it was a domestic court ruling. And if the Chinese pressure a Latin American country to go against its own courts because it might be pro-American or anti-Chinese, you know, that doesn't exactly resonate in Brasilia and Buenos Aires and the rest. It doesn't mean that the U.S. policy couldn't use a lot of work and a bit of a facelift when it came to diplomacy, but hey, when you've got the tools, you've got the tools.