The Worst Deal America Ever Made: The Panama Canal is next for Trump

At the turn of the 20th century, empires were colliding, global trade was exploding, and the United States was rapidly shedding its isolationist past. Steel battleships replaced wooden fleets. Corporations began wielding power once reserved for governments. And control of the oceans meant control of the empires.
But there was a problem. Sailing from the Atlantic to the Pacific still meant a brutal, months-long journey around the southern tip of South America. Ships were forced through the waters of Cape Horn, where warm currents from the Atlantic collided with freezing Antarctic seas, generating some of the most violent weather on the planet.
Hurricane-force winds, waves as tall as buildings, ice-cold temperatures that turned minor damage into death sentences. Navigation was treacherous, charts were unreliable. A single miscalculation could drive a ship straight onto jagged rock or into open ocean with no hope of rescue. Thousands of vessels were lost, tens of thousands of sailors never came home, and even when ships survived, the cost was enormous.
Months of lost time, spoiled cargo, exhausted crews, and financial ruin for companies that fell behind their competitors. This wasn’t just inconvenient. It was a choke point that dictated global trade and punished anyone who challenged it. So the world’s great powers began asking a dangerous question.
What if the planet itself could be reshaped? In Central America, a narrow strip of land stood between two oceans and whoever controlled it wouldn’t just control trade, they’d control the future. Barely 40 miles wide at its narrowest point, it represented the difference between global dominance and strategic irrelevance.
What followed was one of the most ambitious construction projects in human history, and one of the deadliest. But the Panama Canal wasn’t just built with steel and concrete. It was built through corruption, engineered revolutions, and the quiet sacrifice of tens of thousands of lives. So, was the Panama Canal an engineering miracle or the most expensive asset America had ever given away? And did Panama gain independence or inherit a fully built monopoly it never had to finance? And when a nation builds, stabilizes, and then relinquishes a global choke point,
is that statementship or a catastrophic business decision? Let’s try and find out. Hello, I’m Mike Joburg, Marine Corps veteran and filmmaker. We will try to answer these questions on today’s episode of Forgotten History. Beginning of the toughest 26 days in Marine Corps history. The beginning of the toughest 26 days in Marine Corps history. With confidence in our armed forces.
The 36th President of the United States died this afternoon. Telling their children and women in here to call it off. At the dawn of the 20th century, global trade was accelerating faster than governments could control it. Steam power had transformed shipping. Naval fleets grew larger, faster, and deadlier. But despite all that progress, the world was still chained to geography.
Moving goods or warships between the Atlantic and the Pacific required an unforgiving voyage around the southern tip of South America, a journey that could take months and often claim lives along the way. For the United States, this wasn’t just an inconvenience, it was a strategic liability.
After the Spanish-American War, American leaders were confronted with a hard truth. A modern naval power could not afford to have its fleet divided by an entire hemisphere. Warships needed to move from coast to coast in weeks, not months. Commerce faced the same problem. Raw materials, manufactured goods, and oil shipments were bleeding time and money with every unnecessary mile.
Competitors who solved the problem first wouldn’t just profit, they would dominate global trade. And sitting at the center of it all was a brutal irony. The Atlantic and Pacific Oceans were separated by a strip of land barely 40 miles wide, yet ships were dying on journeys that stretched more than 12,000 miles to get around it. By the late 1800s, the idea of cutting through land was radical, it was inevitable.
So the only questions left were who would attempt it, who would control it, and how much human cost was the world willing to ignore to make it happen. And France believed it could solve the problem first. Less than a decade earlier, Ferdinand de Lesseps helped oversee the construction of the Suez Canal in Egypt, a sea-level passage cut through a flat, arid desert.
The climate was dry. The terrain was predictable. There were no mountains, no locks, no meaningful elevation changes. The Suez Canal had slashed thousands of miles off trade routes between Europe and Asia and instantly transformed global commerce. Its success made De La Seps internationally famous and convinced investors that geography itself could be reshaped.
Panama looked on paper like the next logical step, but paper ignored reality.In the late 1870s, de Lesseps turned his attention to Colombia’s Panamanian province. At the time, Panama did not exist as an independent country. It was a Colombian territory. Panama’s Panamanian province was the opposite of Egypt. Dense jungles replaced desert.
Torrential rain fell for months at a time. Hills collapsed without warning, sending mud and rock into freshly dug trenches. De La Seps insisted on a sea-level canal like the Suez. Engineers warned it wouldn’t work. The terrain was too unstable and it flooded unpredictably. Elevation changes made a straight cut nearly impossible.
Those warnings were dismissed. The work moved forward anyway, driven by steam-powered excavators, dredges, and locomotives. Massive industrial machines, never designed for jungle heat or constant rain. Boilers corroded. Tracks sank into mud. Entire machines were buried by landslides or left idle when repairs became impossible.
When the machinery failed, progress slowed to a crawl, and human labor filled the gap. Then came the diseases. Malaria and yellow fever tore through the workforce. At the time, their causes were not understood. Stagnant water from excavation created perfect breeding grounds for mosquitoes, and workers died faster than they could be replaced. Entire camps were abandoned.
By the mid-1880s, thousands were dying every year. Estimates placed the death toll of the French effort at more than 20,000 lives As conditions worsened, corruption followed Progress reports were falsified to keep the money flowing Bribes were paid to silent engineers and journalists Who warned the project was failing Stock was aggressively marketed to small French investors warned the project was failing.
Stock was aggressively marketed to small French investors, many of them ordinary families, who were told success was just months away. In reality, the canal was unraveling. By 1889, the deception collapsed along with the project. The French Panama Canal Company declared bankruptcy, wiping out investors, exposing widespread fraud, and igniting one of the largest financial scandals in French history.
What remained in Colombia’s Panamanian province was a half-dug canal, rusting equipment, and a death toll that had already made the project infamous, long before anyone else ever touched it. For the next decade, Colombia struggled to decide what to do with it. Bogota lacked the money and technical capacity to finish the canal on its own, but allowing a foreign power to take control of the project meant surrendering sovereignty over a land that could reshape global trade.
Meanwhile, interest in the canal didn’t fade. It intensified. By the early 1900s, the United States viewed an interoceanic canal as essential to both commerce and national defense. And in 1902, under the guidance of President Theodore Roosevelt, Washington purchased the remaining assets of the failed French company, equipment, rail lines, surveys, and excavation rights for $40 million.
But the United States still didn’t own the land. To move forward, American diplomats negotiated the Hay-Haran Treaty, which would grant the U.S. a long-term lease over the Canal Zone in exchange for payment to Colombia. Washington approved the deal. Colombia’s Senate rejected it. From Bogota’s perspective, the compensation was inadequate for the land that would instantly become one of the most valuable corridors on Earth.
The treaty died, and with it, earth. The treaty died, and with it, Colombia’s leverage. Inside Colombia’s Panamanian province, local elites were watching closely. For decades, Panama had been governed from afar. Taxes flowed east to Bogota, investments rarely flowed back. Many influential Panamanians believed the canal would be built regardless and that if Colombia remained in control, Panama would reap none of the benefits.
So two men quietly moved to the center of events. Jose Agustin Arango, a lawyer and political organizer, became the chief architect of the separation plan. He believed independence was the only path forward and began coordinating support among the local leaders. At the same time, Manuel Amador Guerrero, a physician with political ambitions, traveled to the U.S.
to gauge whether Washington would oppose or support a break from Colombia to ensure they weren’t acting alone. And then, a French engineer and lobbyist named Philippe Buenavarilla, a former shareholder in the failed Canal Company, became a crucial intermediary. Though not Panamanian, he had deep connections in Washington and a personal financial interest in seeing the canal completed.
Together, these men aligned local ambition with American strategic goals. In November of 1903, Panamanian leaders declared independence from Colombia. Colombia attempted to send 500 troops to crush the uprising, but U.S. warships, including the USS Nashville, were already offshore and effectively blocked any Colombian landing or advance by sea.
Meanwhile, American forces and Panamanian railroad officials refused to transport Colombian soldiers across the Isthmus. Stranded in Cologne and without a route to Panama City, the Colombian force never reached the rebels, leaving the Declaration of Independence to succeed with no direct engagement. The outcome was decided before it began. And three days later, the United States formally recognized the new nation of Panama.
Within weeks, a treaty was signed granting the United States control over a 10-mile-wide Panama Canal Zone, along with sweeping rights to build, govern, and defend the canal. The treaty wasn’t signed in Panama, it was signed in Washington by Felipe Bueno Varela, acting on Panama’s behalf.
Panama had achieved independence, but it entered the world already bound to the canal that would define its future. Construction began in 1904, almost immediately after the treaty was signed, but this time the approach was different. The United States abandoned the French dream of a sea level canal and adopted a lock-based system, raising ships above sea level and lowering them again on the opposite side.
It was a concession to geography and a recognition that Panama could not be treated like Egypt, but engineering alone wouldn’t solve the problem. Before excavation could move forward, the United States tackled what had defeated the French first, disease. American physician Dr. William Gorgas, implemented large-scale sanitation measures based on emerging research linking mosquitoes to malaria and yellow fever.
Standing water was drained, buildings were screened, entire neighborhoods were fumigated. The results were dramatic. Yellow fever was effectively eliminated within two years. Malaria rates dropped sharply. For the first time, workers could survive long enough to finish the job. And with disease under control, construction accelerated.
Steam shovels carved through the Calabro Cut, slicing through mountains that had resisted every previous attempt Rail networks were expanded to remove millions of cubic yards of earth Concrete was poured on an unprecedented scale to build the massive lock systems But accidents were still constant Landslides, crushed equipment and men. Explosions misfired. Heavy machinery failed. Though deaths declined from the French-era levels, thousands still lost their lives.
But after a decade of continuous work, the canal was finally completed. In August of 1914, the Panama Canal officially opened, connecting the Atlantic and Pacific Oceans for the first time. A journey that once took months around the Cape Horn could now be completed in hours. The world had been reshaped.
For Panama, independence came with limits. The canal that defined the nation’s global importance was not under Panamanian control. Revenues flowed outward, decisions were made elsewhere, and the canal zone functioned less like a partnership and more like an American-controlled enclave. For the United States, the benefits were immediate.
The canal became a strategic lever, one that shaped military planning, foreign policy, and global commerce for decades. But control came at a cost. Panamanian resentment simmered as generations grew up watching foreign flags fly over land that split their country in two. Protests erupted, negotiations stalled, and the canal became both an economic engine and a constant reminder of constrained sovereignty.
It would take nearly a century to resolve, and in 1977, the Torrijos Corridor Treaties set the process in motion to transfer control of the canal back to Panama. But the treaties do more than that. They mark the commitment of the United States to the belief that fairness and not force should lie at the heart of our dealings with the nations of the world the transition was gradual deliberate and politically contentious on both sides by that point the united states had already paid the price in full the canal had cost roughly 375
million to build an astronomical sum for the early 20th century, representing more than half of the federal budget at the time. The United States had bore the cost of operating, defending, and maintaining one of the most important waterways on Earth. Just as importantly, the canal only existed because Panama existed.
The United States had helped guarantee Panama’s independence in 1903, shielding the new nation at birth and anchoring its future to the canal itself. Without American backing, Panama likely never becomes a country, and without the canal, it never becomes strategically indispensable yet under american control the canal was never treated as a private machine polls largely covered operation and maintenance the real return wasn’t revenue it was power the ability to move fleets between oceans the ability to shape global trade routes, the ability to control a choke point
the world depended on. And in 1999, that control officially ended. Panama assumed full authorityover the canal. It had never built, but had long claimed. Since then, the canal has become the backbone of the Panamanian economy, generating billions of dollars in revenue and cementing the country’s global relevance.
And today, the canal remains just as valuable, and arguably more so. Global trade has intensified, supply chains have tightened, and while Panama controls the canal foreign influence now surrounds it Chinese linked companies operate major ports on both ends Chinese investments flow through the region and Washington once again finds itself watching a strategic asset it no longer directly controls From a business standpoint the numbers don’t lie.
The United States paid to create a nation, paid to build an irreplaceable global asset, absorb the early losses, stabilize the operation, then walked away just as the asset’s value began to compound. We didn’t divest because the canal was failing. We divested after the risk was gone and before the upside fully arrived.
Today, that same asset generates billions in revenue, anchors a national economy, and serves as a strategic choke point in an increasingly unstable world. increasingly unstable world. In any boardroom, that decision would be called what it is, selling a monopoly infrastructure asset after paying the startup costs and before collecting the long-term returns.
History may debate the politics, but on the balance sheet the loss is unmistakable. Which raises a fair question, would this decision have been made if anyone other than Jimmy Carter had been president? Let us know your thoughts in the comments below. Thank you for watching Forgotten History. Please like, share, and subscribe.
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