President-elect Donald Trump has ignited a diplomatic dispute with Panama after suggesting that his administration might reclaim control over the Panama Canal. During an event in Arizona, Trump criticized the 1977 decision by then-President Jimmy Carter to transfer the canal to Panama, labeling the tolls as "ridiculous" for ships passing through.
Trump argued that the current tolls imposed by Panama unfairly disadvantage the U.S. Navy and American commerce. He also voiced concerns over China's influence on the interoceanic route, emphasizing, "We would never allow it to fall into the wrong hands." He warned on Truth Social, "If Panama cannot ensure the canal's safe, efficient, and reliable operation, we will demand its return without hesitation." Trump denounced the tolls as "absurd" and a "total scam," asserting, "The Panama Canal is a vital national asset for the United States due to its crucial role in the economy and national security." The business mogul implied that under his leadership, such conditions would be unacceptable.
"If the moral and legal principles behind this generous gesture are not honored, we will demand the return of the Panama Canal to the United States," Trump declared. "So, I urge Panamanian officials to act accordingly," he added.
The Panama Canal, completed by the United States in 1914, was handed over to Panama on December 31, 1999, under the Torrijos-Carter Treaties signed in 1977. Since then, Panama has successfully managed the canal, generating nearly $5 billion in revenue for the fiscal year 2024 and contributing $2.47 billion to the treasury.
Panama's Firm Stand and Global Support
In response to Trump's comments, Panamanian President José Raúl Mulino delivered a resolute reply. "The canal belongs to Panama and will remain so. Our country's sovereignty and independence are non-negotiable," Mulino stated in a video shared on X.
The president emphasized that the Panamanian administration ensures efficient and profitable operations, defending the tolls as necessary for maintenance. From China, Foreign Ministry spokesperson Mao Ning expressed support for Panama, recalling China's historical backing for Panama's sovereignty over the canal. "We believe that under Panama's efficient management, the canal will continue to make new contributions to global integration," she remarked.
The Panamanian leader, referencing treaties that establish canal sovereignty, explained that tolls are set publicly in open hearings. Trump, on Truth Social, retorted, "We'll see about that." Shortly after, he shared an image of an American flag with the caption: "Welcome to the U.S. Canal."
The Strategic Role of the Panama Canal
The Panama Canal is a pivotal axis of global trade, allowing ships to connect the Atlantic and Pacific Oceans without circumnavigating South America. In 2023, it faced operational challenges due to drought, leading to increased tolls for transit reservations. Panama, with the United States, China, Japan, and South Korea as primary canal users, has normalized its operations after overcoming climate-related constraints. However, toll adjustments are anticipated for 2025.
Although Trump officially assumes the presidency on January 20, he has already begun exerting political pressure in the waning days of Joe Biden's administration. At the AmericaFest conservative event in Arizona, he promised a "Golden Age" for the United States, envisioning a robust economy, secure borders, and the resolution of international conflicts like those in the Middle East and Ukraine. In this context, the threat to reclaim the Panama Canal adds to a growing list of promises and measures the Republican aims to implement in his next term.
Understanding the Panama Canal Controversy
Why did Donald Trump criticize the Panama Canal tolls?
Donald Trump criticized the Panama Canal tolls as being "ridiculous" and unfairly disadvantageous to the U.S. Navy and American commerce.
How has Panama managed the canal since taking control?
Since gaining control in 1999, Panama has successfully managed the canal, generating substantial revenue and operating efficiently.
What role does the Panama Canal play in global trade?
The Panama Canal is crucial for global trade, enabling ships to travel between the Atlantic and Pacific Oceans without navigating around South America.