Despite a treaty that handed Panama ownership of the canal 25 years ago, Donald Trump wants the U.S. to take it back—an idea that Panama’s leadership opposes and prediction markets say has little chance of success.
The president-elect views control of the Panama Canal, a vital shipping shortcut through Central America, as a national security issue. The canal shortened shipping routes by 8,000 nautical miles compared to sailing around South America, making it a vital piece of infrastructure. The United States oversaw the canal’s construction in 1908, and Panama has owned and operated it since 1999.
As of Jan. 16, CFTC-regulated prediction market Kalshi gives Trump a 30% chance of reclaiming the Panama Cana. Manifold gives Trump a 29% chance, and Polymarket only gives Trump an 11% chance. Kalshi’s market lasts until the next presidential term on Jan. 20, 2029. Manifold gives Trump until Jan. 1, 2029 to secure U.S. ownership or at least a 50-year lease for the Panama Canal. Polymarket’s Panama Canal market only lasts through 2025.
| Prediction Market Platform | Probability as of 1/16/2025 | Resolution Deadline |
| Kalshi | 30% | Jan. 20, 2029 |
| Manifold | 29% | Jan. 1, 2029 |
| Polymarket | 11% | Jan. 1, 2026 |
Trump’s desire to reclaim direct U.S. control of the Panama Canal reopens complicated issues that a 1977 treaty put to rest. Prediction market traders don’t think Trump will overcome that difficult history.
Quick Facts: The Panama Canal in the Nutshell
How the Panama Canal Was Built: Throughout the 1800s, great naval powers wanted a shortcut on South American shipping routes. In 1903, President Theodore Roosevelt made it happen. He sent troops to Panama to help it win independence from Columbia.
In return, Panama signed a treaty allowing the United States to build its own canal through Panama for a one-time charge of $10 million and an annual fee of $250,000. The United States finished it in 1914.
Why Panama Owns the Panama Canal: After building the Panama Canal, the United States secured a zone where it could operate the canal. In 1964, Panama nationalists tried to fly a Panama flag over the canal. A riot suppressed by the U.S. military strained relations between the two countries and underscored the growing risks of operating the canal.
Presidential administrations from Nixon to Carter secured U.S. rights to use the canal instead of operating it. In 1977, a treaty set the terms to transfer ownership to Panama. Panama took control of the canal on Dec. 31, 1999, per the treaty’s terms.
Why Trump Wants the Panama Canal Back: Trump falsely accused Panama of letting China control the Panama Canal. He also objected to rate increases Panama imposed on the canal in 2023. According to the New York Times, Republicans dating back to Ronald Reagan’s presidency objected to Panama’s ownership. However, 16 Republicans and 52 Democrats voted to ratify the treaty giving Panama ownership of the canal.
Trump’s focus on the Panama Canal is sudden but in character with his transactional approach to foreign policy. The Council on Foreign Relations noted that Trump’s 2017 inaugural address focused in part on “reducing U.S. trade deficits and rebalancing burden sharing within alliances.” His 2019 trade war with China increased prices on Chinese imports and failed to reduce the trade deficit.
Predicting Trump’s specific targets isn’t always easy, but his demands for improved American positions over enemies and allies alike is one of his constants.
