On Sunday, US President-elect Donald Trump stated that his administration will endeavour to reclaim ownership of the Panama Canal.
Panamanian President Jose Raul Mulino rebuked him for his views.
Here’s more on what Trump stated and why the Panama Canal is important to the US:
What did Donald Trump say?
Trump brought up the Panama Canal during AmericaFest, an annual event hosted by the conservative nonprofit Turning Point.
“We’re being ripped off at the Panama Canal like we’re being ripped off everywhere else,” he said at the Arizona event, adding that the US “foolishly gave it away”.
Following AmericaFest, Trump shared a photo on his Truth Social platform of the US flag floating over a narrow body of water with the comment, “Welcome to the United States Canal!”
Following Trump’s statement, he and Panamanian President Mulino exchanged jabs.
“Every square metre of the Panama Canal and its surroundings belongs to Panama and will continue to do so,” Mulino stated in a taped statement posted on his X account.
On his Truth Social platform, Trump reposted a news article concerning Mulino’s statement with the caption “We’ll see about that”.
In a Saturday Truth Social post, Trump also alluded to China’s rising control over the Panama Canal. “It was solely for Panama to manage, not China, or anyone else,” he claimed. “We would and will NEVER let it fall into the wrong hands!”
China does not control the canal. However, CK Hutchison Holdings, a Hong Kong-based business, has operated two of the canal’s ports, at the Caribbean and Pacific entrances, since 1997.
Mulino stated on Sunday that China has no influence over the Panama Canal.
What exactly is at stake in the dispute?
The Panama Canal is a man-made waterway located on the Panama Isthmus that connects the Pacific and Atlantic oceans.
Approximately 14,000 ships pass through the canal each year. The waterway accounts for approximately 2.5 percent of worldwide sea trade and 40 percent of all US container traffic.
The canal is critical to the United States’ ability to import commodities from Asian countries. The US also uses the canal to export commodities such as liquefied natural gas.
Who built the canal?
Between 1904 and 1914, the canal was primarily completed by the United States, with then-President Theodore Roosevelt managing the project.
Who owns it?
The Panamanian government owns the canal.
When did Panama take ownership?
The US handed up ownership of the canal to Panama on December 31, 1999, under a 1977 pact signed by then-President Jimmy Carter.
“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 the United States of America, in full, quickly and without question,” Mr. Trump said.
The president-elect did not provide any additional information regarding how this would be accomplished.
Is the canal drying up?
Drought in Central America had an impact on the Panama Canal in 2023.
The canal’s locks run on the nearby man-made Gatun Lake. Low water levels in the lake prompted canal authorities to limit the number of ships utilising the channel and raise usage costs.
In the previous fiscal year, the Panama Canal suffered a 29% reduction in ships. Between October 2023 and September 2024, 9,944 people crossed the canal, compared to 14,080 the previous year.
Traffic on the canal has restored to pre-drought levels. However, the cost for next year is projected to rise.
Mulino stated in his statement that “the tariffs are not set on a whim”, and that the increased shipping rates will help to pay for upgrades made by the Panamanian government to allow more ship traffic via the canal.
What has Donald Trump suggested?
Before the November election, Trump’s presidential campaign was based on the non-interventionist “America First” doctrine. However, since becoming president, he has discussed “territorial expansion” several times, with the Panama Canal being one of the regions he has lately mentioned as a possibility.
Trump has also hinted at Canada. On December 18, he wrote on TruthSocial, “Many Canadians want Canada to become the 51st state.” They would save significantly on taxes and military security. I think it’s an excellent idea. “51st State!!!”
It’s unclear if the president-elect was serious. His remarks come amid rising tensions between the United States and Canada. Following Trump’s recent threat to put tariffs on goods from their northern neighbour, Canadian Finance Minister Chrystia Freeland resigned, and pressure mounted on Prime Minister Justin Trudeau to quit.
Trump has also indicated interest in Denmark’s autonomous area, Greenland. On Monday, Trump stated on Truth Social that he has appointed Ken Howery as US ambassador to Denmark, adding to the post that “the United States of America feels that the ownership and control of Greenland is an absolute necessity”.
Trump made this idea during his first term as well, but it was rejected by Danish officials, with the Danish prime minister assuring Danish media that Greenland is not for sale.
About The Author
