President-elect Trump demanded Panamanian authorities either lower fees for U.S. ships to transit the Panama Canal, or return its control to the United States.
Why it matters: The U.S. ceded one of the world’s most crucial pieces of infrastructure in 1999, and China has become increasingly influential in its operations since.
Catch up quick: Trump, in a lengthy series of Saturday evening posts to Truth Social, said American naval and commercial ships were being treated in an “unfair and injudicious way.”
- Trump blasted past administrations for returning the canal to Panama’s control, which he called a “token of cooperation.”
- “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, and without question,” Trump said.
The other side: Panama’s president, Jose Raúl Mulino, posted a video on social media Sunday night rejecting Trump’s demands.
- “The sovereignty and independence of our country are not negotiable,” Mulino said.
- “Our canal has the mission to serve humanity and its commerce,” Mulino added. “That is one of the greatest values that the Panamanians offer to the world.”
The intrigue: Trump quoted Mulino’s response on Truth Social and said “We’ll see about that!”
- He subsequently posted a picture of the American flag flying over the canal and the message “Welcome to the United States Canal!”
Context: Panama granted the U.S. the right to build the canal and control the land on either side in 1904.
- In 1977 President Jimmy Carter signed a treaty that returned the canal to full Panamanian control by the end of 1999 in exchange for its permanent neutrality.
- The canal has long been viewed as a tool of colonialism and colonial control. Panama sees the canal today as a key factor in its self -determination and national interest amid a changing global economy.
By the numbers: About 10,000 ships a year transit the canal, though in recent times severe drought has limited capacity and helped push transit rates higher.
- The International Trade Administration estimates more than 70% of all ships transiting the canal are going to or from a U.S. port.
- About 2.5% of all global maritime trade passes through the canal, per McKinsey.
Zoom out: China has invested heavily in operations in the Canal Zone in recent years, raising concerns about the zone’s neutrality.
- In 2021 the Center for Strategic and International Studies warned a “key decision point” was coming for U.S. interests in the region, given China’s expansion.
- The U.S. ambassador reportedly cautioned last year about the situation not escalating to where Panama has to choose between the U.S. and China.
What they’re saying: Panamanian politicians blasted Trump’s statement.
- “This young Panamanian independent deputy will defend his country with his life if necessary,” National Assembly member Manuel Alberto Samaniego Rodriguez posted on X, calling Trump’s remarks “regrettable.”
Trump, speaking Sunday at the Turning Point Action Conference in Phoenix, Arizona, called Panama’s fees “ridiculous” and “highly unfair.”
- “The United States has a big and vested interest in the secure, efficient and reliable operation of the Panama Canal,” he said.
- It’s falling into the wrong hands — it was not given for the benefit of others,” Trump continued. “It was given with provisions, you have to treat us fairly and you are not treating us fairly.”
By Ben Berkowitz – axios