President-elect Donald Trump has accused Panama of charging too much to use the Central American passage and is threatening to regain U.S. control if the canal risked falling into what Trump has referred to as the “wrong hands”.
Speaking at AmericaFest - an annual event organised by an allied conservative group - Turning Point, Trump accused Panama Canal authorities of ripping America off, “like we're being ripped off everywhere else."
The canal was handed over to Panama at the end of the 20th century based on a treaty between former U.S. president Jimmy Carter the then Panamanian dictator Omar Torrijos in 1977.
Trump’s beef is that Panama’s pricing is disingenuous to the U.S. given that the canal was previously owned by the U.S. Consistent with his playbook around curbing China’s control globally, Trump also signalled to Panama that greater influence by China’s on this globally important shipping passage would be watched closely.
"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,” said Trump.
The inbound US president also posted an image on Truth Social of an American flag flying over a narrow body of water, with the missive: "Welcome to the United States Canal!"
Unsurprisingly, Panamanian President Jose Raul Mulino was none too pleased with Trump’s comments underlined hint of interests in territorial expansion. In a recorded message, Panama’s national leader rebuked Trump’s sentiments by noting that Panama's independence was non-negotiable and that China had no influence on the canal's administration.
Within a statement released on X, Raul Mulino also reminded the market that the passage rates Panama charged, were not set "on a whim".
"Every square meter of the Panama Canal and the surrounding area belongs to Panama and will continue belonging (to Panama).”
Within a retort to Mulino’s comments, Trump responded by saying, “We'll see about that!"
While China neither controls nor administers the Panama canal – which accounts for 2.5% of global seaborne trade - subsidiary of Hong Kong-based CK Hutchison manages two ports located on the canal's Caribbean and Pacific entrances.