While much of the Canal’s original legislation expired upon turnover of the Canal to Panama, one key treaty relevant to U.S. and Chinese influence in the Canal remains active with no expiration date. The Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, or the
Neutrality Treaty, between Panama and the United States guarantees permanent neutrality of the Canal with fair access for all nations and nondiscriminatory tolls. Only Panama may operate the Canal or maintain military installations in Panamanian territory.
The United States, however, reserved the right to exert military force in defense of the Panama Canal against any threat to its neutrality. Any interpreted Chinese threat to the Canal’s neutrality could activate the U.S. forces through this treaty, meaning current and future Chinese interventions should be calculated with this potential response in mind.