Earlier this week, United States President-elect Donald Trump said his new administration will try to regain control of the Panama Canal.
The Republican president-elect used his first major rally since winning the White House on Nov. 5 to bask in his return to power as a large audience of conservatives cheered along, a display of party unity at odds with a just-concluded budget fight on Capitol Hill where some GOP lawmakers openly defied their leader’s demands.
Trump brought up the Panama Canal at AmericaFest, an annual event organized by the conservative group Turning Point.
Reviving Old Tensions
Trump said that when he’s president, “This complete rip-off” of the U.S. “will immediately stop.” If not, he said, the waterway could “be returned to the United States of America in full and without question.”
Shortly after Trump’s speech, Mulino released a video declaring that “every square meter of the canal belongs to Panama and will continue to belong” to his country.
Without mentioning Trump by name, Mulino addressed Trump’s complaints over rising fees for ships crossing the canal, saying they are set by experts who take into account operational costs and supply and demand factors.
“The tariffs are not set on a whim,” Mulino said. He noted that Panama has expanded the canal over the years to increase ship traffic “on its own initiative” and added that shipping fee increases help pay for improvements.
Mulino said, “Panamanians may have different views on many issues, but when it comes to our canal and our sovereignty, we will all unite under our Panamanian flag.”
Climate, Costs, and Control
The Panama Canal Is a man-made water passage built on the Panama Isthmus, linking the Pacific Ocean to the Atlantic Ocean. The canal was built between 1904 and 1914, mostly by the US, with then-President Theodore Roosevelt overseeing the construction. The United States built the canal and looked for ways to facilitate the transit of commercial and military vessels between its coasts. On December 31, 1999, the US handed over the canal ownership to Panama under a 1977 treaty signed by then-President Jimmy Carter.
The 51-mile (82 km) Panama Canal cuts across the Central American nation and is the main link between the Atlantic and Pacific oceans. The waterway, which allows up to 14,000 ships to cross per year, accounts for 2.5% of global seaborne trade and is critical to U.S. imports of autos and commercial goods by container ships from Asia and for U.S. exports of commodities, including liquefied natural gas.
The canal depends on reservoirs to operate its locks. It was heavily affected by droughts in Central America in 2023, which forced it to substantially reduce the number of daily slots for crossing ships. With fewer ships using the canal each day, administrators also increased the fees that are charged to all shippers for reserving a slot. With weather returning to normal in the later months of this year, transit on the canal has normalized. But price increases are still expected for next year.
The US reserved the right to use military force in defense of the canal against any threat to its neutrality—a threat that now appears to be coming from the US itself.
The neutrality treaty guarantees fair access for all nations and non-discriminatory tolls. Different shipping companies do pay different amounts for passing through the canal, but this depends on the size of the ship and the load on board, not on the country of origin.
The issue of climate change as it relates to the water supply for the Panama Canal is a misconception. It is more relevant to talk about weather cycles that result in some years receiving less water than the average. It is more an issue of water demand than water supply. The expansion of the Panama Canal, the growth in the number of transits, and urbanization.
