In a dramatic move, US President-elect Donald Trump has threatened to demand the return of the Panama Canal to American control, citing what he calls unfair shipping fees.
The Panama Canal, an essential waterway that facilitates global trade, is currently under the control of Panama, a situation that has been in place since 1999 following a historic agreement with the United States. However, Trump’s comments have sparked fresh controversy as he criticises Panama’s pricing system and raises concerns over increasing Chinese influence in the region.
Speaking on his Truth Social platform, Trump expressed his frustration over the rising fees for US ships using the canal, a vital passageway for trade between the Atlantic and Pacific Oceans. “Our Navy and Commerce have been treated in a very unfair and injudicious way. The fees being charged by Panama are ridiculous,” he wrote.
He went on to call the situation a “complete ‘rip-off'” of the United States and vowed to put an immediate stop to it. “This complete ‘rip-off’ of our Country will immediately stop,” Trump declared, emphasising that his administration would take action to secure what he sees as American interests in the region.
The Panama Canal, which was completed by the United States in 1914, has been under Panama’s control since 1999, following a 1977 agreement signed by then-President Jimmy Carter. Under the terms of the deal, the US agreed to hand over full control of the canal to Panama, a move seen as a significant step in improving relations between the two countries.
However, Trump’s remarks suggest he may seek to renegotiate that arrangement. He added, “It was solely for Panama to manage, not China, or anyone else,” referring to what he sees as the growing influence of China around the canal. “We would and will NEVER let it fall into the wrong hands!”
Trump’s comments also touched on the security and operational efficiency of the canal, with the president-elect warning that if Panama could not ensure the smooth functioning of the waterway, the US would seek to regain control. “If Panama cannot ensure the secure, efficient, and reliable operation of the canal, then we will demand that the Panama Canal be returned to us, in full, and without question,” he said.
While Panama has yet to officially respond to Trump’s comments, the threat has raised concerns about the future of the canal, which is crucial to global shipping. An estimated five percent of the world’s maritime traffic passes through the canal each year, with the waterway being particularly important for shipping between Asia and the United States.
The canal allows ships to avoid the lengthy and dangerous route around the southern tip of South America, making it a critical link for global trade. Major users of the canal include the United States, China, Japan, and South Korea, all of which rely on its services to move goods efficiently between continents.
In recent years, the Panama Canal has seen a surge in revenues, with the Panama Canal Authority reporting nearly $5 billion in earnings for the 2024 fiscal year. This record performance highlights the canal’s continued importance to global trade and its financial significance to Panama.
Trump’s threats come at a time when he is set to take office in January, following his victory in the November elections. Although he has not yet officially assumed the presidency, Trump has been active in shaping US foreign policy, particularly in relation to trade and international relations.
As an entrepreneur, Trump has long positioned himself as a champion of American business interests. During his presidential campaign, he promised to “put America first” and ensure that the US received fair treatment in its dealings with other countries. His recent statements about the Panama Canal seem to be part of this broader agenda, as he seeks to address what he views as unfair practices that harm American businesses and industries.
The Panama Canal has been a focal point of US foreign policy for over a century, and its strategic importance has only grown in recent years as global trade has increased. For Trump, reclaiming control of the canal would be a bold move to assert US dominance in the region and protect American interests.
However, such a move would likely face significant opposition, both within Panama and internationally. The 1977 agreement that transferred control of the canal to Panama was seen as a major step toward fostering cooperation between the two nations, and any attempt to reverse that decision could strain diplomatic relations.
Additionally, the issue of China’s growing influence in the region adds another layer of complexity to the situation. In recent years, China has invested heavily in infrastructure projects across Latin America, including in Panama, and Trump’s comments suggest that he sees this as a threat to US interests in the region. China’s involvement in the construction of the new Panama Canal expansion locks, which opened in 2016, has further raised concerns about its growing influence over the waterway.
