Trump Threatens Panama Canal Takeover Over "Excessive" Fees.

 

President-elect Donald Trump has stirred controversy by suggesting the United States might reclaim control over the Panama Canal if Panama does not reduce what he characterized as "excessive" fees for the use of the vital maritime chokepoint. Speaking at a conservative event in Arizona, Trump decried the current management of the canal, accusing Panama of unfairly profiting from its operations.

“Has anyone ever heard of the Panama Canal?” Trump asked rhetorically, as reported by Reuters. “Because we're being ripped off at the Panama Canal like we're being ripped off everywhere else.” His comments underscored his broader agenda of revisiting international agreements he views as disadvantageous to the United States.

A Historical Flashpoint

The Panama Canal, constructed by the United States in the early 20th century, has long been a strategic and economic linchpin for global trade, linking the Atlantic and Pacific Oceans. After decades of U.S. control, the canal was handed over to the Panamanian government in 1977 under the terms of the Torrijos-Carter Treaties. This agreement stipulated that Panama would assume full control of the canal in 1999 while maintaining its neutrality and openness to international shipping.

Since the handover, the Panamanian government has managed the canal through the Panama Canal Authority (ACP), which oversees its operations and finances. The canal generates significant revenue for Panama, with tolls charged to ships based on size, type, and cargo. However, these fees have periodically been a point of contention for international shippers and, now, for Trump.

Trump’s Threat and Rationale

Trump's remarks suggested that Panama's toll policies were not only burdensome for American businesses but also potentially influenced by foreign powers, particularly China. He claimed that Panama’s management of the canal violated the principles of fairness and neutrality enshrined in the original agreement.

“It was given to Panama and the people of Panama, but it has provisions,” Trump said. “If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, quickly and without question.”

His assertion of potential Chinese influence stems from the involvement of a Hong Kong-based company in managing two ports near the canal. While this arrangement has long been public knowledge, Trump’s comments hinted at a belief that such relationships undermine the canal’s neutrality and compromise American interests in the region.

Panama Responds: Sovereignty Non-Negotiable

Panama's leadership swiftly and firmly rejected Trump’s comments, emphasizing the nation's sovereignty over the canal and its adjacent territories. President Jose Raul Mulino dismissed the allegations of external influence, particularly from China, as baseless.

“Every square meter of the Panama Canal and its adjacent areas belongs to Panama and will continue belonging to Panama,” Mulino declared. “The canal has no direct or indirect control from China, nor the European Union, nor the United States or any other power.”

Mulino also underscored the importance of the canal to Panama’s national identity and economy, framing its management as a point of pride and a testament to Panama’s ability to handle such a critical infrastructure independently. He stated that any misrepresentation of the canal’s operations would be rejected outright by the Panamanian government and its people.

The Broader Context

Trump’s comments reflect a pattern of his administration’s approach to international relations: revisiting long-standing agreements and challenging the status quo in pursuit of perceived American interests. This approach has drawn both praise and criticism, with supporters lauding his willingness to confront inequities and detractors warning of potential diplomatic fallout.

In the case of the Panama Canal, Trump's remarks tap into broader concerns about China's growing influence in Latin America and beyond. China's Belt and Road Initiative and investment in critical infrastructure projects worldwide have raised alarms in Washington about Beijing's strategic ambitions. The mere association of Chinese companies with operations near the canal is enough to spark fears of geopolitical competition in a region traditionally regarded as within the United States' sphere of influence.

Potential Consequences

Trump’s suggestion of reclaiming the Panama Canal raises numerous legal and logistical questions. Under international law and the terms of the Torrijos-Carter Treaties, the canal is unequivocally Panamanian property. Any attempt to reassert American control would likely face significant diplomatic resistance, not only from Panama but also from the international community, which relies on the canal as a vital trade route.

Moreover, such a move would risk destabilizing U.S.-Panama relations, which have been largely cooperative since the canal's handover. The canal represents a cornerstone of Panama’s economy, contributing nearly 6% of the country’s GDP. Efforts to undermine Panama’s control could have far-reaching economic and political implications.

Historical Echoes

Trump’s remarks echo historical debates surrounding the Panama Canal’s ownership and control. The canal’s construction and early operation were emblematic of U.S. imperialism in Latin America, and its eventual handover was seen as a significant step toward rectifying those historical grievances. Revisiting the issue risks reopening old wounds and rekindling anti-American sentiment in the region.

Conclusion

Trump’s threat to take over the Panama Canal represents a provocative challenge to a long-settled issue. While his comments resonate with his broader “America First” rhetoric, they raise significant diplomatic and legal questions. Panama’s firm rejection of his claims underscores the canal’s importance to the nation’s sovereignty and pride. As the situation develops, it will test the resilience of U.S.-Panama relations and could become an early litmus test for Trump’s foreign policy in Latin America.