In a surprising move, President-elect Donald Trump has floated the idea of reclaiming control over the Panama Canal, arguing that shippers are unfairly burdened with exorbitant fees.
This suggestion was swiftly rebuffed by Panama’s conservative president, José Raúl Mulino, who views it as an infringement upon his nation’s sovereignty. The exchange has sparked fresh controversy amid Trump’s first major rally since his election win.
The call to regain control of the Panama Canal was made during Trump’s first major rally since his victory in the November 5th election. Addressing a large audience of conservatives at Turning Point USA’s AmericaFest in Arizona, Trump pledged that his administration would aim to deliver a booming economy, secure U.S. borders, and quickly end wars in the Middle East and Ukraine.
Trump’s comment about the Panama Canal was among a list of grievances he aired during the rally. He expressed his dissatisfaction with the decision of the United States to hand over control of the canal to Panama, which happened under a treaty signed by President Jimmy Carter in 1977.
Trump lamented that shippers are being “ripped off” and charged exorbitant fees due to reduced daily slots for crossing ships, a result of 2023 Central American droughts that forced administrators to scale back operations.
This controversy emerged against a backdrop of political turbulence in Washington. The past week saw Trump at odds with some GOP lawmakers over the nation’s debt ceiling as Congress worked to avoid a government shutdown. Despite this, Trump projected an image of Republican unity at the rally, which was attended by more than 20,000 activists.
Trump ended his speech with a warning to Panama’s officials about possible consequences if they don’t conform to what he referred to as “the principles, both moral and legal,” of giving back control of the canal. However, he did not elaborate on how this would be achieved.
Panama’s president, José Raúl Mulino, responded almost immediately. In a video message, he asserted that “every square meter of the canal belongs to Panama and will continue to belong” to his country. Mulino refuted Trump’s complaints over rising fees for ships crossing the canal, explaining that they are set by experts who consider operational costs and supply and demand factors.
Mulino further declared, “Panamanians may have different views on many issues. But when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag.”
In response to that, Trump posted on social media, “We’ll see about that!” along with a picture of a U.S. flag planted in the canal zone under the phrase, “Welcome to the United States Canal!”
It remains to be seen what further actions, if any, will be taken by his administration regarding the Panama Canal.
The Panama Canal, a vital transportation channel linking the Atlantic and Pacific Oceans, was built by the United States in the early 1900s as a means to facilitate the transit of commercial and military vessels between its coasts. Its control was ceded to Panama on December 31, 1999, and it has since remained a critical revenue source for the Central American nation, generating about one-fifth of its government’s annual income.
Trump’s assertion that his administration might demand the return of the canal to US control could be seen as a significant shift in US foreign policy. It raises questions about how such a move would be legally and diplomatically possible. It also casts light on Trump’s assertive approach to international relations and his readiness to challenge established agreements when he believes they disadvantage American interests.
The dispute also reflects wider tensions within the Republican Party. Trump’s rallying cry for unity came at a time when his relationship with some GOP lawmakers was strained over budget disagreements. The Panama Canal issue could potentially become another point of contention within the party.
Increased shipping costs due to reduced canal usage during droughts and subsequent fee increases have been a cause for concern across the global shipping industry. While President Mulino insists that these fees are not arbitrary and are necessary for the canal’s upkeep and expansion, it’s clear that shippers across the world will be watching this space closely.
Trump’s comments about the canal have added a new dimension to US-Panama relations. With both sides digging their heels in, the issue could become a major foreign policy challenge for Trump’s second term in office. How this matter evolves will not only shape bilateral relations but could also have wider implications for America’s standing in Central America and beyond.
Trump’s statements on the Panama Canal have opened a new chapter in the ongoing saga of his unconventional approach to foreign policy. They raise questions about the sanctity of international treaties and America’s role as a global leader. Should Trump push ahead with this contentious plan, it could potentially set a precedent for renegotiating other historic agreements, with implications that extend far beyond the borders of Panama.
The Panama Canal issue also underlines the broader tensions between economic interests and national sovereignty. As global economies grapple with the impacts of climate change, such as the Central American droughts that affected the canal’s operations, these tensions are likely to increase.
As Trump embarks on his second term in office, it remains to be seen how he will navigate these complex issues. The Panama Canal dispute is not just about control over a strategic waterway – it’s a litmus test for how America will engage with its allies and negotiate its interests on the world stage in the years to come.
