Trump Threatens to Take Back Panama Canal

by Ryan Hanrahan

Reuters’ Gram Slattery reported Sunday that “President-elect Donald Trump threatened to reassert U.S. control over the Panama Canal on Sunday, accusing Panama of charging excessive rates to use the Central American passage and drawing a sharp rebuke from Panamanian President Jose Raul Mulino.”

“Speaking to a crowd of supporters in Arizona, Trump also said he would not let the canal fall into the ‘wrong hands,’ warning of potential Chinese influence on the passage,” Slattery reported. “After the event, he posted an image on Truth Social of an American flag flying over a narrow body of water, with the comment: ‘Welcome to the United States Canal!’”

However, the Associated Press’ Will Weissert, Juan Zamorano and Gary Fields reported that Jorge Luis Quijano, who served as the waterway’s administrator from 2014 to 2019 said that “there’s no clause of any kind in the neutrality agreement that allows for the taking back of the canal. Legally, there’s no way, under normal circumstances, to recover territory that was used previously.”

“Trump, meanwhile, hasn’t said how he might make good on his threat,” Weissert, Zamorano and Fields reported. “There’s very little wiggle room, absent a second U.S. invasion of Panama, to retake control of the Panama Canal in practical terms,” said Benjamin Gedan, director of the Latin America Program at the Woodrow Wilson International Center for Scholars in Washington.”

“Gedan said Trump’s stance is especially baffling given that Mulino is a pro-business conservative who has ‘made lots of other overtures to show that he would prefer a special relationship with the United States,’” Weissert, Zamorano and Fields reported. “He also noted that Panama in recent years has moved closer to China, meaning the U.S. has strategic reasons to keep its relationship with the Central American nation friendly.”

“In a recorded message released by Panama’s President Mulino on Sunday afternoon, the nation’s leader said that Panama’s independence was non-negotiable and that China had no influence on the canal’s administration. He also defended the passage rates Panama charged, saying they were not set ‘on a whim,’” Slattery reported. “China does not control or administer the canal, but a subsidiary of Hong Kong-based CK Hutchison Holdings has long managed two ports located on the canal’s Caribbean and Pacific entrances.”

“The United States largely built the canal and administered territory surrounding the passage for decades. But the United States and Panama signed a pair of accords in 1977 that paved the way for the canal’s return to full Panamanian control. The United States handed over control of the passage in 1999 after a period of joint administration,” Slattery reported. “‘Every square meter of the Panama Canal and the surrounding area belongs to Panama and will continue belonging (to Panama),’ Mulino said in his statement, which was released on X. Trump then responded to Mulino: ‘We’ll see about that!’”

Canal of Extreme Importance to U.S. Ag Shipping

Farm News Media’s Dennis Rudat reported in January that “representing 14% of all U.S. maritime trade, 72% of all the cargo transiting the Panama Canal is either coming from or going to the U.S., including a substantial portion of U.S. agricultural exports, according to (to American Farm Bureau Federation Economist Betty) Resnick.”

“‘So, the Panama Canal is really a critical choke point for U.S. agriculture and U.S. economy in general,’ Resnick said, with 18% of corn exports, 32% of soybean exports and over 90% of sorghum exports moving through the shipping canal,” Rudat reported.

Axios’ Ben Berkowitz reported that globally, “about 2.5% of all global maritime trade passes through the canal. … About 10,000 ships a year transit the canal, though in recent times severe drought has limited capacity and helped push transit rates higher.”