Donald Trump has refused to rule out using military force to retake the Panama Canal that was returned by the US to Panama decades ago.
As his inauguration nears, the president-elect has ramped up his threats to take back the critical shipping artery in order to secure the flow of US trade, reduce “exorbitant” shipping fees and counter perceived Chinese influence in the area.
Yet the image in 2018 of a worker chiselling the Trump name off a tower in Panama City may also hold a more personal explanation for renewed interest in the waterway.
Who controls the Panama Canal?
The canal, which was built in Central America by the US more than a century ago, connects the Atlantic and Pacific oceans and is regarded as one of the world’s most important routes for maritime trade.
It allows around 14,000 ships a year to cut out the 7,000 nautical mile trip around Cape Horn in South America.
The US operated the 51-mile waterway through Panama until, in the wake of anti-American riots, Jimmy Carter, then-president, signed a 1977 treaty to relinquish control of the canal by the end of the century.
Panama took full control of the canal in 1999, which it operates through the Panama Canal Authority (PCA).
Why does Trump want the Panama Canal?
In December, Mr Trump threatened to seize control of the canal, declaring the waterway as vital to America’s security and economic interests but it was being run in a “very unfair and injudicious way”.
He doubled down on those threats this week, saying that he could not “assure” the world that he would not use military or economic force to acquire the canal.
The comments sparked uproar in Panama, with Javier Martinez-Acha, the country’s foreign minister, responding: “The sovereignty of our canal is not negotiable and is part of our history of struggle.”
The US is the Panama Canal’s biggest customer, responsible for around three-quarters of the traffic who move through the passage each year.
The president-elect has voiced his disdain over what he called “rip off” transit fees US ships are charged for using the passage.
“Our navy and commerce have been treated in a very unfair and injudicious way,” Mr Trump vented in December. “The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the US.
Fees to use the Panama Canal have escalated in recent years – The Image Bank RF/Danny Lehman
“This complete rip-off of our country will immediately stop.”
Variable rates set by the PCA have soared in recent years amid prolonged droughts brought on by El Niño and climate change, forcing authorities to reduce the capacity to conserve water.
The number of ships crossing the canal each day fell from 36 to 22 in 2023, creating a backlog of ships queuing for weeks and driving up the prices through increasing competition.
Dr Christopher Sabatini, senior fellow for Latin America at Chatham House, said shipping fees were likely at the forefront of Mr Trump’s mind.
“In his soul, he is a person who battles for improving the US’s competitiveness overseas,” he told The Telegraph, adding: “He is hoping to put the other side on the backfoot and extract concessions in the US interest.”
What is the Chinese threat?
Mr Trump has also claimed that the canal could fall into the “wrong hands” and last month falsely accused Panama of allowing Chinese soldiers to operate the shipping route.
“Look, the Panama Canal is vital to our country. It’s being operated by China. China! And we gave the Panama Canal to Panama, we didn’t give it to China,” he said. “They’ve abused that gift.”
Panama has repeatedly denied Mr Trump’s allegations that China has been given a role in running the canal or is given preferential rates to use it.
“There are no Chinese soldiers in the canal, for the love of God,” José Raúl Mulino, Panama’s president, said on Thursday. “The world is free to visit the canal.”
A Hong Kong-based firm, CK Hutchison Holdings, does manage two ports at the canal’s entrances, which some analysts have suggested raises competitive and security concerns for the US.
Ryan C Berg, director of the Americas programme at the Center for Strategic and International Studies, suggested this set up could be used by China to gather intelligence on maritime operations.
“China exercises, or could exercise, a certain element of control even absent some military conflagration,” Mr. Berg told the New York Times. “I think there is reason to be worried.”
Mao Ning, a spokeswoman for the Chinese foreign ministry, said in December that China “will as always respect Panama’s sovereignty” over the Panama Canal.
Panama cut diplomatic ties with Taiwan in 2017, becoming one of the first nations to recognise the island as part of China.
Is Trump evoking a patriotic response?
The president-elect has also sought to harness sentiment over the “lost” territory to further stoke patriotism, taking an apparent leaf out of Ronald Reagan’s playbook.
The former president, who originally popularised Mr Trump’s guiding slogan “Make America Great Again” in 1980, previously stated that the American people were the canal’s “rightful owners” because “we bought it; we paid for it; we built it”.
Jimmy Carter and Omar Torrijos at the signing of the Panama Canal Treaty which has been in Donald Trump’s cross hairs – HUM Images
Mr Trump criticised the recently deceased Jimmy Carter on Tuesday for handing over control of the canal when he was president, calling it a “disgrace”.
“Jimmy Carter gave it to them for $1 and they were supposed to treat us well. I thought it was a terrible thing to do,” Trump said on Tuesday at a news conference at Mar-a-Lago, in Florida.
He also called the US border with Canada an “artificially drawn line”, promised to rename the Gulf of Mexico the “Gulf of America” and reiterated interest in buying Greenland.
“He likes to think of himself as a dealmaker, someone who is expanding the security perimeter of the US. He wants to play the role of a disruptor, breaking the norms and reasserting greatness,” Dr Sabatini said.
What is Trump’s personal history with Panama?
In 2011, Mr Trump opened up the Trump Ocean Club International Hotel and Tower, a 70-story, sail-shaped skyscraper that loomed over Panama City.
It was the Republican’s first international hotel venture and was one of the tallest buildings in South America – yet it soon would become a nightmare.
The former Trump Tower Skyscraper in Panama City – diego_cervo/iStockphoto
In 2015, Trump’s management team was accused of taking excessive bonuses and mismanagement. In 2017, a Reuters investigation alleged that the skyscraper had been exploited by organized crime groups for money laundering.
The same year, businessman Orestes Fintiklis purchased hundreds of units inside the building, becoming controlling owner and putting in motion the severing of Trump’s name from the tower.
The Trump Organisation contested the acquisition, but a Panamanian court ruled in Mr Fintiklis’s favour.
“As with all things Trump, it is personal. There is latent resentment toward Panama for siding with the owners over this dispute,” Dr Sabatini said. “The picture of them prying his name off the hotel has to sting for Trump.
“The lines between foreign policy, business and ego are very porous.”
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Publish date : 2025-01-08 08:15:00
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