The Panama Canal is a crucial sea link that connects the Atlantic and Pacific Oceans and has of late become a target of political speeches, most notably from President-elect Donald Trump. His statements on who owns the canal have raised some debate on sovereignty, foreign relations, and what would that involve.
History of the Panama canal
The Panama Canal, completed in 1914, was under the United States’ control until late in the 20th century. It had been cut to give ships an easy passage instead of the lengthy and perilous route around South America. This was a U.S. possession obtained through treaties-most significantly, the Hay-Bunau-Varilla Treaty of 1903-signed under questionable circumstances of U.S. support for Panama’s independence from Colombia.
In 1977, President Jimmy Carter and the Torrijos-Carter Treaties paved the way for the gradual reversion of the canal to Panama, which took center stage when the full transfer of powers was effected on December 31, 1999. The agreement provided that the canal was to be open to ships of all nations for commercial purposes, hence a continued crucial international route of trade.
Trump’s recent threats
In December of 2024, Trump did it again when he threatened to retake control of the Panama Canal unless Panama lowers the transit fees of American ships. At an Arizona rally, he said the Panamanians were charging “excessive rates” and that it was “exploiting the American interest”. He promised, if those fees are not changed, he would seek the return of the canal to U.S. hands “in full, quickly and without question”.
Trump’s remarks have generated intense uproar among Panamanian authorities. President José Raúl Mulino flatly denied Trump’s claims, underlining that “every square meter of the canal belongs to Panama and that sovereignty is not up for negotiation.” Mulino further stated that the allegations of China’s control over the administration of the canal were false; although Chinese companies operate ports at both ends of the canal, they do not manage it.
Strategic significance of the canal
The Panama Canal is just as important to commercial shipping, accounting for about 2.5% of global seaborne trade, as it is of strategic military importance to the United States. Quick movements of naval assets across the oceans are very essential for U.S. military operations. From the way Trump talks, it seems he believes taking back this strategic asset will protect American interests in the face of rising global competition, especially from China.
In the last decade, China has increased investments in Panama operating ports at both ends of the canal through subsidiaries, raising U.S. defense concerns about potential leverage over such a critical maritime choke point.
Legal and diplomatic implications
But despite such brazen declarations by Trump, any attempt to regain the Panama Canal would run into insurmountable legal and diplomatic obstacles. According to international law, Panama is the legitimate sovereign over the canal, which was returned in 1999 in accord with well-established treaties. The United States could not take it back unilaterally without breaking those agreements and possibly suffering severe diplomatic repercussions, destabilizing all relationships with other countries in Central America and beyond.
In addition, the words of Trump have been an important turn in the rhetoric of U.S. foreign policy; they indicate the trend of more hostile postures toward allies and neighbors. That could undermine the decades of diplomacy that have been built since the end of U.S. sovereignty over the canal.
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