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The 1903 treaty, signed not by a Panamanian but by a French lobbyist, granted the U.S. control over a ten-mile-wide strip of land, this became the Canal Zone, a segregated, American-run colonial enclave. The white American settlers, known as "Zonians" lived in a subsidized colony with their own schools, police, and stores, enjoying privileges denied to the Panamanians who lived on the other side of the fence. The Colombia diplomat at the OAS named the Zone Fence the "Berlin Wall of Latin America". The early Panamanian governments were little more than puppet goverments, content to manage the country for the benefit of a small elite while remaining subservient to Washington and the powerful Canal Zone authorities.

Decades of resentment and national humiliation boiled over on January 9, 1964. When Panamanian students attempted to fly their nation's flag alongside the U.S. flag in the Canal Zone, they were met with violence from Zonian settlers and police. The ensuing riots saw U.S. troops open fire on unarmed Panamanians, killing over 28 students and civilians. This event, known as Martyrs' Day, and caused a surge in Panamanian nationalism and made the return of the Canal an non-negotiable demand.

The goverment's failure to achieve sovereignty led to the 1968 Panamanian coup d'état, which, after a brief Junta, brought Colonel Omar Torrijos and his civilian allies to power. He established a left-leaning civic-military dictatorship that, while authoritarian, was deeply populist and nationalist. Investing in housing, education, and land reform, and brought poor working class Panamanians and minorities into positions of power for the first time. In foreign policy, he was anti-imperialist, offering support to left-wing governments and guerrillas like the Sandinistas in Nicaragua and challenging U.S. hegemony in the region. His singular goal was to reclaim the Canal, a feat he achieved with the signing of the Torrijos-Carter Treaties in 1977, which set a date for the final handover of the Canal to Panama.

In 1981, Torrijos died in a plane crash under highly suspicious circumstances. Many in Latin America believe he was assassinated by the CIA, which viewed his independent nationalism and support for leftist movements as a threat. His death created a power vacuum filled by his intelligence chief, Manuel Noriega.

Noriega was a very different leader. For years, he had been a key CIA asset and informant, a crucial link in America's covert operations in Central America. At the same time, he built a criminal enterprise, deepening his ties with drug cartels like Pablo Escobar's Medellín Cartel, a fact the U.S. was fully aware of and for years complicit in.

Manuel Noriega was a opportunist with no allegiance beyond his own power and wealth. For decades, he was a prized asset of the CIA, a useful strongman in a region Washington was determined to control. But Noriega was loyal to no one he played a dangerous double game, selling intelligence and services to both his CIA handlers and Cuba, profiting from the very Cold War tensions that ravaged Latin America. He also betrayed the Sandinistas in Nicaragua while posing as a fellow Latin American leader, Noriega actively sabotaged their popular revolution. He allowed Panama to be used as a conduit for the U.S.-backed Contras and provided intelligence to undermine the leftist government, all to curry favor with his bosses in Washington. He betrayed regional solidarity for personal gain, helping U.S. imperialism crush a genuine people's movement. Noriega was never a revolutionary or a nationalist.

By the late 1980s, the unpopular Noriega had become too public a liability and was becoming increasingly unreliable. As the U.S. turned on him, he went rogue, attempting to rebrand himself as a nationalist and "anti-imperialist" leader in the likes of the popular Torrijos. He created paramilitary units called the Dignity Battalions to intimidate political opponents and project an image of popular resistance against U.S. aggression. This crisis culminated in the 1989 U.S. invasion.

The situation escalated throughout 1989. After the October coup attempt against Noriega, led by Major Moisés Giroldi, The U.S. offered not a lot of support, ensuring its failure. As if the USA didn't just want Noriega gone, they wanted to manage his replacement and dismantle any vestige of an independent Panamanian military.

In response to growing USA. pressure, Noriega created the "Dignity Battalions," paramilitary units of civilian supporters, and postured as a nationalist standing up to American imperialism. In the May 1989 presidential election, the opposition candidate, Guillermo Endara, was recognized as the election winner by the US goverment. Noriega, unwilling to relinquish power, brutally suppressed the opposition and annulled the results. While an authoritarian act, this provided the U.S. with the perfect moral justification for an invasion it was already planning.

Cornered, Noriega made desperate gestures toward the Soviet Union and Cuba. This was less a genuine ideological movement and more a last-ditch effort to find new allies. For the USA this was a gift. It allowed them to dust off the old Cold War playbook and manufacture the fear of "losing Panama to the Soviets," a baseless but effective piece of propaganda for a public conditioned to fear communism.

The final pretexts were handed to the USA on a silver platter. On December 15, 1989, Noriega's national assembly passed a resolution declaring that a "state of war" existed with the United States. A day later, an incident at a Panama Defense Forces (PDF) checkpoint resulted in the death of an unarmed U.S. Marine, First Lieutenant Robert Paz, under really suspecious circumstances.

This was the spark the White House was waiting for. On December 20, the U.S. unleashed overwhelming and brutal force. The invasion targeted not just military installations but devastated civilian neighborhoods like El Chorrillo, resulting in thousands of civilian casualties that far exceeded the official U.S. count. While Noriega himself was deeply unpopular with many Panamanians who were tired of his corruption and repression, the invasion was a traumatic national wound inflicted by a foreign power.

After days of intense fighting, Noriega was captured and flown to the U.S. for trial. The most significant outcome of the invasion was not the "restoration" of democracy, but the complete dissolution of the Panama Defense Forces. With this act, the USA eliminated the only institution in Panama capable of challenging its control over the Canal Zone, achieving its primary strategic objective.

The U.S. installed the winner of the 1989 election, Guillermo Endara, as president. However, subsequent administrations under presidents Ernesto Pérez Balladares and Martín Torrijos (both from Noriega's own PRD party) were staffed with many of Noriega's former cronies and political allies. The invasion did not cleanse the alledged corrupt system, it simply removed an inconvenient leader and ensured the new power structure would be unconditionally compliant with U.S. interests.