Trump threatens action over Panama canal fees

Donald Trump, the US President-elect, suggested reclaiming the Panama Canal, criticizing “ridiculous” fees for passing ships. Speaking at a rally in Arizona, Trump claimed the United States “foolishly gave away” the canal in 1999 under a treaty signed by President Jimmy Carter in 1977. He warned Panama officials, saying, “If moral and legal principles aren’t upheld, we’ll demand the canal’s swift return to the U.S.”

The United States built the canal in the early 1900s to connect its coasts for military and commercial shipping. Although Panama has controlled the canal since 1999, Trump argued that fee hikes exploit global shippers. Canal administrators raised fees in response to drought-related restrictions in 2023, even as transit normalized later that year.

Shortly after Trump’s remarks at the AmericaFest rally, Panama’s President Jose Raul Mulino released a defiant statement. Without naming Trump, he asserted, “Every square meter of the canal belongs to Panama and will remain so.” Mulino explained that shipping fees reflect operational costs and market demand, funding canal expansions that Panama has undertaken independently.

Mulino emphasized national unity, declaring, “Panamanians may differ on issues, but on our canal and sovereignty, we stand united under our flag.” Despite aligning with Trump on other matters, Mulino rejected any suggestion of U.S. control.

The Panama Canal remains crucial for global trade and Panama’s economy, contributing around 20% of its government revenue. As Trump prepares to take office, tensions over sovereignty and trade are expected to rise.