PHOENIX (AP) — Donald Trump hinted on Sunday that his new government could try to regain control of the Panama Canal that the United States “foolishly” handed over to its Central American ally, arguing that ships are charged “ridiculous” fees to pass through the vital transportation canal connecting the Atlantic and Pacific Oceans.
The conservative Panamanian president José Raúl Mulino, elected in April on a pro-business campaign, firmly rejected that idea, calling it an affront to his country's sovereignty.
Why did Trump make these statements about the Panama Canal?
The Republican president-elect made his comment during his first major rally since winning the White House on November 5, enjoying his return to power as a huge audience of conservatives cheered him on. It was a display of party unity in contrast to a recent budgetary struggle in the Capitol, where some Republican lawmakers openly defied their leader's requests.
Addressing his supporters at the conservative event AmericaFest organized by Turning Point USA in Arizona, Trump promised that his "dream team cabinet" will provide a booming economy, secure the American borders, and quickly resolve the wars in the Middle East and Ukraine.
"I can proudly proclaim that the Golden Age of the United States is about to come," declared Trump. "There is a spirit that we have now that we didn't have not long ago."
His presentation concluded a four-day motivational meeting that drew more than 20,000 activists and projected an image of Republican cohesion despite the turbulence of last week in Congress in Washington, to which Trump sent messages from his Mar-a-Lago mansion in Florida while lawmakers worked to avoid a government shutdown before Christmas.
In his statements in Phoenix, Trump did not mention the drama in Congress, but he did refer to Musk's growing power. In response to insinuations that "President Trump has handed over the presidency to Elon," Trump firmly stated: "No, no. That's not happening...He's not going to be president," said the president-elect.
At the top of a list of grievances - some old, some new - was the Panama Canal.
"We are being swindled in the Panama Canal," he said, regretting that his country "foolishly handed it over."
Is the Canal under total control of Panama?
The United States built the Panama Canal at the beginning of the 20th century in an attempt to facilitate the transit of commercial and military ships between its coasts. Washington transferred control of the canal to Panama on December 31, 1999, under a treaty signed in 1977 during the government of President Jimmy Carter.
The Canal relies on dams to operate its locks and was severely affected by the Central American droughts of 2023, which forced it to substantially reduce the number of daily slots for crossing ships. With fewer vessels using the canal each day, the administrators increased the fees charged to all shipping companies for reserving a slot.
After the weather returned to normal in the last few months of this year, transit through the canal has normalized. However, an increase in prices is still expected in 2025.
Mulino is considered a conservative populist who aligns with Trump's point of view on many issues. Panama is a strong ally of the United States and the canal is crucial to its economy, generating approximately one-fifth of the government's annual income.
In any case, Trump said that, once his second term begins, "if the moral and legal principles of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to the United States of America, in its entirety, quickly and without asking questions.".
"I'm not going to tolerate it," Trump declared. "So, to the officials of Panama, please let yourselves be properly guided."
He didn't explain how that can be achieved.
What was Panama's response to Trump's threats?
Shortly after Trump's speech, Mulino released a video in which he declared that “every square meter of the Panama Canal and its adjacent area belongs to Panama and will continue to be so.”
Without mentioning Trump by name, Mulino addressed the complaints of the president-elect about the increase in fees for ships crossing the Canal, saying that they are set by experts who take into account operational costs, as well as supply and demand factors.
"Tariffs are not a whim," Mulino stated. He pointed out that Panama has expanded the canal over the years to increase ship traffic "by Panamanian decision," and added that increases in tariffs for ships help pay for the improvements.
“Panamanians may think differently on many issues,” the president stated, “but when it comes to our Canal, and our sovereignty, we all come together under one flag: that of Panama.”