Trump threatening to take over the Panama Canal? On Sunday, U.S. President-elect Donald Trump announced that his upcoming administration would seek to reclaim control over the Panama Canal. His remarks prompted criticism from Panama’s President, Jose Raul Mulino.
Trump dismisses claims that Elon Musk is the true influence behind the U.S. president-elect list 2 of 4 From Trump to Bitcoin, inflation, and China: Major economic trends of 2024 list 3 of 4 The uncertain future of U.S. higher education under Trump list 4 of 4 Key highlights from Trump’s first rally as president-elect end of list Here’s a closer look at Trump’s statements and the importance of the Panama Canal to the U.S.:
What did Trump say about Panama Canal?
Speaking at AmericaFest, an annual event organized by the conservative group Turning Point, Trump addressed the issue of the Panama Canal.
“We’re being taken advantage of at the Panama Canal, just like everywhere else,” he remarked during the Arizona event, criticizing the U.S. for what he called “foolishly giving it away.”
Following his speech, Trump shared an image on his Truth Social platform showing the U.S. flag flying over a narrow waterway with the caption: “Welcome to the United States Canal!”
After Trump’s comments, a back-and-forth ensued between him and Panamanian President Mulino.
“Every square meter of the Panama Canal and its surrounding territory belongs to Panama and will remain Panamanian,” Mulino declared in a recorded message shared on his X account.
Trump is threatening to take over the Panama Canal – what’s going on?
Donald Trump shared a news article on Mulino’s comments via his Truth Social platform, adding the caption: “We’ll see about that.”
In another post on Saturday, Trump expressed concerns about China’s increasing involvement near the Panama Canal. He stated, “The canal was meant to be managed by Panama alone—not China or anyone else. We will never allow it to fall into the wrong hands!”
Although China does not control the canal itself, a Hong Kong-based company, CK Hutchison Holdings, has operated ports at both the Caribbean and Pacific ends of the canal since 1997.
In a Sunday post on X, Mulino also emphasized that China holds no influence over the canal.
What is the dispute about?
The Panama Canal, an artificial waterway cutting through the Isthmus of Panama, connects the Pacific and Atlantic Oceans. It facilitates the passage of approximately 14,000 ships each year, contributing to about 2.5% of global maritime trade and 40% of the container traffic to the United States.
The canal is vital for the U.S., enabling the import of goods from Asia and the export of commodities such as liquefied natural gas.
Who built the canal?
Construction took place between 1904 and 1914, led predominantly by the U.S., under the supervision of President Theodore Roosevelt.
Who owns the canal?
Ownership of the canal lies with the Panamanian government.
When did Panama gain control?
Panama assumed control on December 31, 1999, following a 1977 treaty signed by U.S. President Jimmy Carter.
Trump has hinted at the potential for the U.S. to reclaim the canal, stating, “If the moral and legal principles behind this generous act are not upheld, we will demand the immediate and unquestionable return of the Panama Canal to the United States.” He did not provide further details about how this would be possible.
Is the Panama Canal Drying Up?
In 2023, Central America experienced drought conditions that impacted the Panama Canal.
The canal depends on Gatun Lake, a nearby artificial reservoir, to operate its locks. Due to reduced water levels in the lake, canal authorities imposed restrictions on the number of vessels passing through and raised fees for usage.
Trump has also hinted at interest in Canada. On December 18, he wrote on TruthSocial: “Many Canadians want Canada to become the 51st State. They would save a great deal on taxes and benefit from military protection. I think it’s a fantastic idea. 51st State!!!”
It remains uncertain whether Trump’s remarks were intended seriously. His statement came during a period of escalating tensions between the US and Canada. Following Trump’s recent threat to impose tariffs on Canadian goods, Finance Minister Chrystia Freeland stepped down, and calls for Prime Minister Justin Trudeau’s resignation have intensified.
Trump has also shown interest in Greenland, a self-governing territory of Denmark. On Monday, he announced on TruthSocial that Ken Howery had been selected as the new US ambassador to Denmark. In the same post, Trump stated: “The United States believes that owning and controlling Greenland is absolutely essential.”
This isn’t the first time Trump has floated the idea. During his first term, he made a similar proposal, but Danish authorities dismissed it outright, with the Danish prime minister publicly affirming that Greenland is not for sale.
During the last fiscal year, there was a significant 29% drop in ship traffic through the canal. From October 2023 to September 2024, only 9,944 vessels crossed, compared to 14,080 the previous year.
While traffic has since returned to pre-drought levels, fees for canal usage are expected to rise again next year.
In his statement, Mulino emphasized that the increased fees are carefully calculated and not arbitrary. He explained that the additional revenue would help fund improvements made by the Panamanian government to accommodate greater ship traffic.
Jean-Paul Rodrigue, a professor in Maritime Business Administration at Texas A&M University-Galveston, argued that linking the canal’s water supply issues to climate change is misleading. Instead, he suggested that periodic weather cycles causing lower-than-average rainfall are to blame, compounded by increased water demand due to the canal’s expansion, rising transit numbers, and urban development.
Trump’s Proposal
Ahead of the November election, Trump’s campaign focused on a non-interventionist “America First” approach. However, since taking office, he has floated the idea of “territorial expansion” multiple times, with the Panama Canal being one of the territories he has hinted at as a potential target.
