President-elect Donald Trump has stirred another controversy by calling for retaking the Panama Canal, a quarter century after the key shipping route was handed over to Panama by the US in 1999.
It sounds pretty similar to Crimea, Ukraine, which Russia annexed in February/March 2014. Crimea was part of the Soviet Union / USSR and was transferred to the Ukrainian SSR in 1954. After the 1991 collapse of the USSR, Crimea remained predominantly Russian-speaking but a part of Ukraine.
Writing on ‘Truth Social,’ Trump accused Panama of charging US exorbitant rates for using the canal. “The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the U.S.”
Trump also spoke about the Panama Canal at the AmericaFest, an event organized by Turning Point, a conservative group that supports Trump. He said, “We’re being ripped off at the Panama Canal like we’re being ripped off everywhere else.” He further emphasized, “We foolishly gave it away,” a reference to the US handover of the canal to the Panama government, which has operated the canal for 25 years since 1999.
Later, the President-elect posted a photograph of an American flag flying over the Panama Canal with a caption that read, “Welcome to the United States Canal!”
The idea of turning over the canal to the United States was immediately rebuked and rejected by Panama President Jose Raul Mulino, with several other Central American countries rallying in its support. President Mulino said in a statement published on his X account: “Every square meter of the Panama Canal and the surrounding area belongs to Panama and will continue belonging [to Panama].”
In a swift retort, Trump wrote, “We’ll see about that.”
Upbeat by his sweeping victory in the US Presidential elections, Donald Trump has made several controversial remarks recently, igniting tensions with foes and allies alike. For instance, Trump recently referred to Canada as the 51st state of the United States and called the Canadian President a “Governor.” In a separate incident, the incoming US President said he wanted to purchase Greenland, an autonomous Danish territory.
However, of all the controversies that he has stirred off late, the one about the Panama Canal appears to be the most serious. In the Panama Canal, ships are transported through the Gatun Lake, which is about 26 meters or about 85 feet above sea level, by using a network of interconnected locks. Each ship transiting the canal takes about 200 million liters or about 53 million gallons of fresh water.
The severe droughts in the surrounding areas of the canal have caused the water levels to drop, making it more difficult for the canal to operate as intended. This has led to the Panama authorities limiting traffic in the canal and charging higher fees for it. The higher fee has miffed Donald Trump.
In an attempt to quell some of these concerns, the Panama President clarified that the costs have been raised due to climate change-induced difficulties and not imposed on a whim—an argument that Trump has refused to buy.
Trump noted that the Panama Canal is considered vital for US national security, and a secure Panama Canal is crucial for commerce and the rapid deployment of the Navy.
Notably, Donald Trump has also flagged growing Chinese influence over the Panama Canal, albeit without providing any evidence. “It was solely for Panama to manage, not China or anyone else,” he wrote on the Truth Social app. “We would and will NEVER let it fall into the wrong hands!”
The canal is not under Chinese influence per se. However, since 1997, two of the canal’s ports—on the Caribbean and Pacific entrances—have been run by CK Hutchison Holdings, a Hong Kong-based company.
However, there has been some geopolitical shift in Panama’s policy toward China in the last few years. For instance, in a joint statement made in 2017, Panama jettisoned its relationship with Taiwan. It emphasized that it would not have any formal relations with Taiwan, the democratic, self-ruled island state claimed by China.
Some reports allege that China’s control over the region surrounding the canal has continued to grow since.
The Troubled History Of Panama Canal
An artificial 82-kilometer waterway in Panama, the Panama Canal is a conduit of maritime trade that connects the Atlantic Ocean and the Pacific Ocean through the narrow Isthmus of Panama (a land link extending east to west about 640 kilometers from the border of Costa Rica to the border of Colombia).
The canal allows easy transit for ships, allowing them to avoid the long and arduous journey around South America’s freezing, stormy southern edge.
By using the canal, ships traveling between the east and west coasts of the United States can cut their journey by roughly 8,000 nautical miles or about 15,000 kilometers as they would otherwise have to circumnavigate Cape Horn in South America. Similarly, trips between one coast of North America and ports on the other side of South America can save up to 3,500 nautical miles or 6,500 kilometers.
The journey for ships traveling from Los Angeles to New York is around 22 days shorter via the canal than traveling through the Strait of Magellan off Tierra del Fuego, an archipelago that embraces southern Chile and Argentina. This makes the canal one of the most strategic waterways in the world, second only to the Suez Canal.
Notably, the canal is also an engineering marvel, built with great difficulty and considered the most difficult project of its time. The history of this project goes back to the 1530s when the Spanish colonizers in southern Central America were assessing the possibility of building an inter-oceanic canal that would pass through the isthmus at its narrowest point.
Much later, in the 1800s, political and business leaders in the United States and Great Britain desired to ship goods quickly and at a lower cost between the Atlantic and Pacific coasts. To that end, a canal was proposed across the Central American Republic of Nicaragua. The United States and Great Britain negotiated the Clayton-Bulwer Treaty in 1850 to limit the competition over the proposed canal. However, the Anglo-American canal never made it past the planning stage.
Then Colombia proposed its own plan to construct a canal. Colombia, which controlled Panama as a province in 1878, signed an agreement with French engineers to build a canal. The French started digging in 1880 under the direction of Ferdinand de Lesseps, who had previously constructed the Suez Canal in Egypt. A string of difficulties like malaria, yellow fever, and other tropical maladies marred the de Lesseps campaign. After almost nine years, the French effort failed and went bankrupt in 1899.
“In spite of such setbacks, American interest in a canal continued unabated,” according to a US state history archive.
In 1903, then US Secretary of State John Hay signed a treaty with Colombian Foreign Minister Tomás Herrán to build an all-new canal. However, Colombia rejected the offer based on unacceptable financial terms. This led to the US endorsing Panama’s declaration of independence.
“President Roosevelt responded by dispatching U.S. warships to Panama City (on the Pacific) and Colón (on the Atlantic) in support of Panamanian independence. Colombian troops were unable to negotiate the jungles of the Darien Strait, and Panama declared independence on November 3, 1903,” states the archive.
Three days later, the US was granted the right to construct and manage the canal indefinitely by a treaty signed by Panama’s envoy to Washington. The United States gave Panama US$10 million in exchange for the rights, followed by a US$250,000 annuity. The United States also committed to ensuring Panama’s independence.
“Completed in 1914, the Panama Canal symbolized U.S. technological prowess and economic power. Although U.S. control of the canal eventually became an irritant to U.S.-Panamanian relations, at the time, it was heralded as a major foreign policy achievement,” according to the US history.
The canal’s usefulness was proven during World War II when it served as a vital route between the Atlantic and Pacific oceans for the Allied war effort. However, disputes about who should control the canal, how to treat Panamanian workers, and whether or not the US and Panamanian flags should fly together over the Canal Zone made the fault lines emerge in the US-Panama relationship.
The Hand Over Of The Canal Became Imminent
These tensions between the US and Panama over the control of the canal peaked on January 9, 1964, when anti-American rioting in the Canal Zone claimed many lives, and the two nations’ diplomatic ties were temporarily severed.
Following years of negotiations for an arrangement that would be fair to Panama, US President Jimmy Carter and Panamanian military leader Omar Torrijos finally arrived at a decision to sign two treaties in 1977. The “Permanent Neutrality Treaty” and the “Panama Canal Treaty.”
Of these, the “Permanent Neutrality Treaty,” which continues in perpetuity, granted the United States the authority to ensure the canal remains secure and open. On the contrary, the “Panama Canal Treaty” stipulated that the United States would hand over the canal to Panama on December 31, 1999, and expire thereafter. Both treaties were signed in 1977 and ratified the following year.
In remarks to Americans following the signing of the treaties, Carter stated, “The people of Panama have been dissatisfied with the treaty because we have controlled a 10-mile-wide strip of land across the heart of their country and because they considered the original terms of the agreement to be unfair. No Panamanian signed it; it was drafted here in our nation.”
“Of course, this does not give the United States any right to intervene in the internal affairs of Panama, nor would our military action ever be directed against the territorial integrity or the political independence of Panama,” Carter added. However, several American politicians were far from elated with this new arrangement. For instance, Ronald Reagan said that the canal belonged to the United States.
In 1999, the Panamanian government assumed authority following a period of joint American-Panamanian rule. Currently, it is operated and managed by the Panama Control Authority, a government-owned entity.
The canal is a key economic asset for Panama, and its control symbolizes the end of imperialism. However, Trump’s remarks have come as a rude shock to the Latin American country and have the potential to derail the relations between the US and Panama.
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