Trump says US will retake the Panama Canal if rates aren’t cut

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President-elect Donald Trump has threatened to have the U.S. reassert control of the Panama Canal amid accusations that Panama is charging excessive rates for using the waterway.

Speaking Sunday in Arizona, Trump also said he would not let the canal fall into the "wrong hands," warning of potential Chinese influence in Panama, Reuters reported.

"Has anyone ever heard of the Panama Canal?" Trump said at AmericaFest, an annual event organized 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 statements were denounced by Panamanian President Jose Raul Mulino, who said that his country would remain independent and that China was not influencing Panama. He also said market conditions were used to set passage rates.

What is the Panama Canal? The Panama Canal is a vital 51-mile-long passageway between the Atlantic and Pacific oceans. It's in the middle of Panama, between Central and South America. The U.S. is the canal's biggest customer, the Guardian says.

Instead of sailing around the southern tip of South America, commercial shippers and naval forces use the canal as a shortcut between oceans. Ships traveling between the east and west coasts of the U.S. save about 8,000 nautical miles.

After a failed attempt by France, U.S. construction on the canal began in 1903 and was completed in 1914. The canal was expanded in 2016.

The canal has system of locks that allow ships to travel across Panama. It operates 24 hours a day every day of the year. Nearly 14,000 ships a year, including commercial shipping and the U.S. Navy, use the waterway.

The Panama Canal and the Suez Canal are considered the world's two most important waterways.

When did Panama gain control of the canal? The U.S. built the canal and operated it until a treaty signed by President Jimmy Carter in 1977 transferred the canal to Panamanian control in 1999.

The Panamanian government controls the canal through the Panama Canal Authority, an 11-member board that oversees the canal's maintenance and security.

Can Trump reassert US control of the Panama Canal? It's not clear how Trump could reassert U.S. control of the canal, and Trump did not say how it could happen. He criticized what he called the “exorbitant” rates Panama is charging the U.S. government, Navy and businesses for using the canal.

Mulino said that canal rates were set in public session and that they take into account “account market conditions, international competition, operating costs and the maintenance and modernization needs of the interoceanic route,” the Hill reported.

What countries use the canal the most? The United States uses the Panama Canal the most, accounting for about 75% of its traffic in fiscal year 2024, according to pancanal.com. That's an increase from 66% in 2019, according to Center for Strategic & International Studies.

China and Japan are second and third, respectively.

SOURCE USA TODAY Network reporting and research; Reuters; pancanal.com; porteconomicsmanagement.org; marineinsight.co.

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