Trump threatens to retake control of Panama Canal unless deal reached
US president-elect Donald Trump threatened to reassert US control over the Panama Canal, accusing Panama of charging excessive rates to use the Central American passage, which allows ships to cross between the Pacific and Atlantic oceans.
Speaking to a crowd of supporters in Arizona on Sunday, Trump also said he would not let the canal fall into the “wrong hands,” warning of potential Chinese influence on the passage.
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 Caribbean and Pacific entrances to the canal.
Trump’s comments came hours after he levelled a similar threat against Panama in a post on Truth Social on Saturday night.
“Has anyone ever heard of the Panama Canal?” Trump said on Sunday at AmericaFest, an annual event organised by Turning Point, an allied conservative group. “Because we’re being ripped off at the Panama Canal like we’re being ripped off everywhere else.”
Trump’s comments were an exceedingly rare example of a US leader saying he could push a sovereign country to hand over territory. It also underlines an expected shift in US diplomacy under Trump, who has not historically shied away from threatening allies and using bellicose rhetoric when dealing with counterparts.
“The fees being charged by Panama are ridiculous, highly unfair,” Trump said.
“It was given to Panama and the people of Panama, but it has provisions. You get to treat us fairly, and they haven’t treated us fairly. 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, quickly and without question,” he said.
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The comments prompted a strong rebuke from Panamanian president Jose Raul Mulino who reaffirmed the country’s sovereignty over the Panama canal on Sunday.
“Every square meter of the Panama canal and the surrounding area belongs to Panama and will continue belonging so,” Mulino said in a recorded statement released on X, adding that Panama’s sovereignty and independence are non-negotiable.
The Panamanian embassy in Washington did not respond to a request for comment.
Several Panamanian politicians, however, took to social media to criticise Trump’s statements and ask the government to defend the canal.
“The government has the duty to defend our autonomy as an independent country,” Grace Hernandez, a deputy from the opposition MOCA party, said on X following Trump’s Truth Social post. “Diplomacy demands steadfastness in the face of regrettable statements.”
The US largely built the canal and administered territory surrounding the passage for decades. But the US and Panama signed a pair of accords in 1977 that paved the way for the canal’s return to full Panamanian control. The US handed over control of the canal in 1999 after a period of joint administration.
The waterway, which allows up to 14,000 ships to cross per year, accounts for 2.5 per cent of global seaborne trade and is critical to US imports of autos and commercial goods by container ships from Asia, and for US exports of commodities, including liquefied natural gas.
It is not clear how Trump would seek to regain control over the canal, and he would have no recourse under international law if he decided to make a play for the passage.
This is not the first time Trump has openly considered territorial expansion.
In recent weeks, he has repeatedly mused about turning Canada into a US state, though it is unclear how serious he is about the matter. During his 2017-2021 term, Trump expressed interest in buying Greenland, an autonomous territory of Denmark. He was publicly rebuffed by Danish authorities before any conversations could take place.
Trump said on Sunday that Stephen Miran, a Treasury department adviser in his first administration, would be the chair of his council of economic advisers.
The council advises the president on economic policy and is composed of three members, including the chair. The council assists in the preparation of an annual report that gives an overview of the country’s economy, reviews federal policies and programmes and makes economic policy recommendations.
Earlier this year, Miran and economist Nouriel Roubini authored a hedge fund study that said the US Treasury last year effectively provided economic stimulus by moderating long-dated bond sales.
The study echoed suggestions by Republican politicians that the Treasury deliberately increased issuance of short-term Treasury bills to give the economy a “sugar high” ahead of the November elections. The Treasury denied any such strategy.
Miran, a senior strategist at Hudson Bay Capital, has also argued that fears over trade tariffs that Trump has threatened to impose after he takes office next month are overblown.
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