In a striking declaration during a rally at AmericaFest in Phoenix, Arizona, on December 22, 2024, President-elect Donald Trump suggested that his administration could attempt to regain control of the Panama Canal, a strategic waterway that the United States relinquished in 1999 under a treaty signed by President Jimmy Carter in 1977. Trump criticized the fees charged to U.S. shippers as 'ridiculous' and claimed that the U.S. was 'being ripped off,' vowing that this 'complete rip-off' would cease under his presidency [af684ee5].
This statement comes amidst rising tensions regarding the canal's economic significance, as it generates about one-fifth of Panama's annual revenue [af684ee5]. The Panama Canal, completed in 1914, has been a pivotal artery for global trade, with approximately 6% of global maritime trade and 40% of U.S. container traffic utilizing it [73f503cc]. Over 73% of ships passing through in 2021 were U.S.-bound, underscoring its importance to American shipping interests [73f503cc]. Trump's remarks reflect his confrontational diplomatic style and raise critical questions about U.S. foreign policy and its relations with Latin America [fba11f42].
In response to Trump's comments, Panama's President José Raúl Mulino firmly rejected the idea of U.S. control over the canal, asserting Panama's sovereignty and stating that the canal belongs to Panama, with fees based on expert assessments [af684ee5]. The Panama Canal Authority reported earnings of $5 billion in the last fiscal year, highlighting the canal's economic importance [fba11f42]. However, Panama's current president faces economic challenges, including rising tolls due to inflation and external pressures from global markets [953fbf6e]. These toll increases have been attributed to inflationary pressures exacerbated by U.S. sanctions on countries like Iran and Venezuela, which have driven up oil prices [953fbf6e].
During his rally, which attracted over 20,000 supporters, Trump emphasized party unity despite recent congressional conflicts and announced Stephen Miran as his choice for the Council of Economic Advisers and Scott Kupor for the Office of Personnel Management. He also noted a $1.1 million donation from Australian billionaire Anthony Pratt to his inaugural fund, adding to his previous donations [af684ee5]. Trump's past business ventures in Panama have faced significant hurdles, and the recent ruling by the Panama Supreme Court declaring the closure of the Cobre Panamá mine unconstitutional has raised concerns about its impact on the economy, affecting 5% of the country's GDP and 75% of its export revenue [953fbf6e].
As Trump highlighted the canal as a 'VITAL National Asset' for the U.S., he expressed concerns about China's growing influence in Panama since the country recognized China in 2017 [73f503cc]. The U.S. Southern Command has warned of potential threats from Chinese investments in the region [73f503cc]. However, Trump's demands for U.S. control face legal challenges due to the Neutrality Treaty that governs the canal's status [73f503cc]. Current President Mulino has yet to respond to Trump's statements, leaving the situation open to speculation about the future of U.S.-Panama relations [61225da7].