Colombia's refusal of the United States' offer to pay for and build the canal largely stemmed from the fear that the United States would never leave Panama. The negotiations involved in the Hay-Herran Treaty in 1903 fell through, primarily because Colombian politicians did not want to cede control over the territory and feared that the U.S. would establish a lasting presence there. This led to increased tensions and eventually contributed to the U.S. support for Panama's independence movement, which resulted in the establishment of the Panama Canal Zone.
While Colombia was concerned about the potential loss of sovereignty, the idea of the canal being built in Nicaragua instead of Panama was also a factor in the broader discussions at the time, but the primary reason for the refusal was indeed related to fears of U.S. domination.
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