From: jameskerlindsay
Questions have arisen regarding whether the incoming Trump Administration might be planning to retake control of the Panama Canal [00:00:00]. On December 21, 2024, President-elect Donald Trump posted a message on his social media network threatening Panama over its management of the strategically vital waterway [00:00:05]. This led to a strong response from the Panamanian president, raising questions about a potential military invasion [00:00:19].
Strategic Importance of Waterways
Strategic waterways are crucial in international relations [00:00:50]. These narrow bodies of water connect major oceans or seas, significantly shortening shipping routes, reducing costs for global trade, and providing vital passages for military forces [00:00:55]. Consequently, they are often a focal point for geopolitical tensions as countries compete for influence [00:01:07]. The Panama Canal is a prime example [00:01:14].
The Panama Canal’s Value to the United States
The Panama Canal, located in the Republic of Panama, is an 82 km (51-mile) waterway connecting the Atlantic and Pacific Oceans, drastically reducing the 13,000 km (8,000-mile) route around South America [00:01:17]. While essential for international trade, it holds unique value for the United States [00:01:32]. The U.S. is the canal’s largest user, accounting for approximately 60% of its traffic [00:01:40]. It is crucial for transporting agricultural products, industrial goods, and energy supplies [00:01:44]. Additionally, it serves as a vital military passage, enabling the U.S. Navy to move between the East and West Coasts [00:01:50]. This makes it economically and militarily indispensable for the United States [00:01:58].
History of the Panama Canal and US Relations
The idea of a waterway across the Isthmus of Panama was recognized for centuries, but serious construction efforts began after the Suez Canal’s completion [00:02:51].
French Construction Attempt and US Intervention
Construction of the Panama Canal began in 1881 under French engineer Ferdinand de Lesseps, who built the Suez Canal [00:03:06]. However, the project faced significant engineering challenges, widespread disease, and mismanagement, leading to its abandonment in 1889 [00:03:15].
Despite these difficulties, the United States was keen to continue the project [00:03:31]. When Colombia rejected a treaty allowing the U.S. to resume construction, Washington supported Panamanian rebels seeking independence [00:03:37]. On November 3, 1903, during a revolt, the U.S. prevented Colombian forces from intervening, leading to Panama’s declaration of independence [00:03:49]. Less than two weeks later, on November 18, the U.S. government signed a treaty with the new Panamanian administration, guaranteeing its independence in return for complete and perpetual control over a 10-mile (15 km) wide zone surrounding the canal [00:04:01]. Work resumed, and the canal was completed in 1914 [00:04:20].
Growing Resentment and the 1977 Treaty
While the canal’s completion was a global trade landmark, resentment among Panamanians grew [00:04:27]. U.S. influence over internal affairs was significant, and the Canal Zone, operating under U.S. law, enjoyed privileges and greater wealth than the rest of the country [00:04:35]. This culminated in protests in 1964 [00:04:47].
Recognizing the damage to U.S. interests, as the canal became a symbol of American imperialism during the Cold War, President Jimmy Carter initiated negotiations on its future [00:04:58]. On September 7, 1977, the United States and Panama signed an agreement known as the Carter-Torrijos Treaty [00:05:10]. Key elements of the treaty:
- Panama would gain complete control of the canal on December 31, 1999, after a period of joint administration [00:05:19].
- The canal would remain neutral territory, allowing ships from all countries, including military vessels, free use [00:05:28].
- Crucially, a clause allowed the U.S. to intervene militarily to protect the canal’s neutrality if needed [00:05:38].
Opposition to the Handover and the Noriega Era
Many in the United States, particularly conservative Republicans, opposed the agreement [00:05:47]. They argued the transfer was a dangerous surrender of U.S. interests over a vital asset the U.S. had built and paid for [00:05:53]. Concerns were also raised about Panama’s ability, as a small and unstable country, to ensure the canal’s security and neutrality [00:06:03].
These fears seemingly gained traction after the death of military leader General Omar Torrijos in 1981, when General Manuel Noriega rose to power [00:06:12]. Under Noriega, Panama became a corrupt and violent criminal state and a hub for international drug trafficking [00:06:25]. As a result, the U.S. invaded Panama in December 1989, overthrowing and arresting Noriega, who was later imprisoned in the U.S. [00:06:32].
With Panama under democratic control, preparations for the handover of the canal continued, and the transition was completed as planned on New Year’s Eve 1999 [00:06:42].
Post-Handover Tensions and Trump’s Concerns
The successful handover marked a critical turning point for Panama, which has since steadily grown its position as a global trade hub [00:07:06]. This was further enhanced by an expansion project in 2016 that significantly increased the canal’s capacity [00:07:16].
While relations with the United States were initially good, tensions have emerged over the past decade [00:07:24]. The U.S. has frequently expressed concerns about corruption and lack of transparency in Panama’s financial dealings, notably highlighted by the “Panama Papers” scandal [00:07:31].
On top of this, differences have arisen concerning the canal itself, fed by two main factors:
Increasing Transit Fees
Panama has raised tolls for vessels using the waterway, citing rising maintenance costs, the expense of the canal expansion project, and climate change issues like reduced rainfall affecting water levels [00:07:59]. These increases have disproportionately affected U.S. shipping, leading to complaints from U.S. businesses [00:08:19].
China’s Growing Influence
For many years, Panama recognized Taiwan (Republic of China) instead of the People’s Republic of China [00:08:30]. However, in 2017, Panama switched its allegiance [00:08:38]. Since then, China has invested significantly in Panama, funding and building ports and other infrastructure projects related to the canal [00:08:44]. This contributes to a general sense of U.S. concern about the rise of China and has led to specific worries that Beijing might exert too much control over Panama and the strategically vital waterway [00:08:52].
These factors have renewed complaints in some circles that the United States should never have given up control of the canal [00:09:06].
Trump’s Statements and Panama’s Response
Against this backdrop, President-elect Donald Trump posted a lengthy message on his Truth Central social media platform on December 21, 2024 [00:09:15]. He emphasized the canal’s vital importance to the United States and the economic and human costs of its construction [00:09:25]. Trump insisted that Panama should administer the canal solely by itself, without relying on entities like China [00:09:30]. He also condemned the fees faced by U.S. shipping, calling for the “ripoff” to stop immediately [00:09:39].
Panama’s President, Jose R. Molino, quickly responded, insisting that “every square meter of the Panama Canal and its adjacent zone belongs to Panama and will remain so” [00:09:47].
“The sovereignty and independence of our country are not negotiable.” [00:10:01]
Unwilling to let the matter rest, Trump responded with another post saying, “We’ll see about that,” followed by an image of a U.S. flag flying over water with the caption “Welcome to the United States Canal!” [00:10:07].
Potential US Actions and Implications
Given the aggressive tone of recent posts, an immediate concern is that Trump might consider military action [00:10:25]. However, this seems unlikely, as Trump has generally shied away from military engagements, and his campaign focused on avoiding overseas conflicts [00:10:33]. However, as an issue directly affecting U.S. economic and commercial interests, which Trump particularly focuses on, he might see it as more directly relevant to the U.S. than other issues [00:10:48].
Challenges to Military Intervention
Any aggressive move to reclaim control of the canal would likely face significant international opposition and would certainly violate international law [00:11:03]. The 1977 treaty governing the return of the canal does not permit unilateral military action to reclaim control of the Canal Zone [00:11:14].
Alternative Avenues
Observers suggest the incoming administration has several other avenues to address its concerns:
- Diplomatic Negotiations: The U.S. could pursue diplomatic negotiations to discuss fees and limit external influence over the canal [00:11:32]. However, current strained relations could make such negotiations difficult [00:11:40].
- Judicial Solutions: Another route could be arbitration or mediation by a third party, as Article 14 of the 1977 treaty explicitly allows for such options [00:11:48]. The willingness of the Trump Administration to pursue this path is uncertain [00:12:03].
- Economic Measures: The new administration could introduce sanctions or offer Panama economic incentives to influence its policies [00:12:09].
It remains to be seen whether any of these approaches would be pursued or if Trump intends to escalate the matter further [00:12:20]. This surprising spat over an issue many thought resolved has become another significant question regarding the effects of a second Trump term on global politics [00:12:27].