ICYMI: President-Elect Trump Threatens to Retake Panama Canal, Igniting Firestorm

President-elect Donald Trump took a direct shot at Panama over the weekend, calling out what he described as “exorbitant” tolls and unfair treatment of U.S. interests at the Panama Canal, a critical artery for global trade.

“The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the U.S. This complete ‘rip-off’ of our Country will immediately stop,” Trump wrote on Truth Social.

The Panama Canal facilitates nearly 6% of global maritime trade, with 70% of its traffic either originating or destined for the United States. Trump’s remarks come as the canal grapples with significant challenges, including drought-driven challenges and rising operational costs, which have already forced toll increases and reduced vessel capacity.

A Strategic Flashpoint

The canal, opened in 1914 and managed by Panama since 1999, has long been a focal point of U.S. strategic and economic interests. Built under the leadership of President Theodore Roosevelt, the waterway transformed global trade by linking the Atlantic and Pacific Oceans, albeit at a high cost in human lives and U.S. resources.

In 1977, the Torrijos–Carter Treaties transferred canal control to Panama, a move that remains contentious. Trump’s comments hint at the possibility of pressuring Panama over what he sees as unfulfilled “moral and legal principles” tied to the treaty.

Trump’s rhetoric also drew attention to China’s growing presence in Panama, where Chinese companies operate two major ports near the canal. “We would and will NEVER let it fall into the wrong hands!” Trump declared, suggesting potential policy shifts to counter perceived threats.

Panama Pushes Back

Panama’s President José Raúl Mulino was quick to reject Trump’s assertions, stating, “Every square meter of the Panama Canal and its adjacent zones is part of Panama, and it will continue to be.” In a video message on X, Mulino underscored Panama’s sovereignty over the waterway, dismissing claims of inflated tolls.

Local leaders echoed his sentiment, with Panama City Mayor Mayer Mizrachi calling Trump’s remarks a rallying point for national unity. “We will not, nor will we ever, be the 51st state,” Mizrachi said in a pointed statement.

Later Sunday, Trump continued to troll Panama, rebuking President Mulino’s response with the caption: “We’ll see about that!” He then shared an image showing a US-flagged vessel in a canal with the caption “Welcome to the United States Canal!”

Global and Industry Reactions

China responded by reaffirming its respect for Panama’s sovereignty and neutrality in managing the canal. “The canal is not directly or indirectly controlled by any major power,” a Chinese Foreign Ministry spokesperson said Sunday.

Meanwhile, U.S. maritime historian Sal Mercogliano weighed in, noting that Trump’s comments reflect the canal’s strategic importance.

“The U.S.-Panama relationship over the canal has always been symbiotic,” Mercogliano said. “While concern about China’s influence is valid, there’s no immediate threat to American trade. However, Trump’s stance may signal a broader focus on protecting maritime trade routes.”

For the maritime industry, Trump’s remarks add a layer of uncertainty to an already volatile environment. From climate-induced disruptions to rising costs, operators face mounting challenges. As Trump’s administration takes shape, the industry will closely monitor how these geopolitical tensions play out in Washington and beyond.

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