CaliToday (02/1/2026): A diplomatic firestorm has erupted over the Panama Canal after local authorities bulldozed a monument honoring Chinese heritage, prompting a furious rebuke from Beijing. The incident unfolds against a volatile backdrop where the United States, under President Donald Trump, is aggressively moving to reassert dominance over the strategic waterway.
A "Barbarian Act" On Saturday, the municipal office of Arraijan, located near the canal’s Pacific entrance, demolished the monument erected in 2004. Local officials justified the removal by citing "structural damage" that posed a danger to the public.
However, the move drew immediate condemnation from China. In a statement released Monday on X (formerly Twitter), Beijing's Ministry of Foreign Affairs blasted the "forced demolition," calling the monument a testament to the Chinese laborers who crossed the ocean in the 19th century to build the trans-oceanic railway and the canal.
"China condemns the forced demolition... which served as a memorial to the long-standing friendship between China and Panama," the statement read.
Internal Rifts in Panama The demolition also exposed fractures within the Panamanian government. President Jose Raul Mulino publicly broke with local officials on Sunday, declaring there was "no justification" for the destruction. Labeling the incident an "unforgivable irrational act" and an "atrocity," President Mulino bowed to pressure from political leaders and ordered the "immediate restoration" of the monument to its original site.
The Shadow of Washington While the demolition may appear local, analysts view it through the lens of intense geopolitical rivalry. Since returning to power, President Donald Trump has openly threatened to reclaim control of the canal which the US handed over in 1999 arguing that Beijing holds too much sway over its operations.
The US and China remain the top users of the 80km waterway, which handles 5% of global maritime trade. Trump has also demanded preferential fuel conditions for US vessels transiting the route.
In a significant shift signaling Washington's tightening grip, Hong Kong-based Hutchison Holdings, which operates ports at both ends of the canal, has agreed to divest its assets to US investment giant BlackRock. This move is widely interpreted as a strategic victory for the US in curbing Chinese influence in America’s "backyard."