President-elect Donald Trump ignited a new diplomatic controversy with his recent comments demanding Panama reduce its fees on the Panama Canal or face demands for the canal’s return to U.S. control. Speaking to an enthusiastic crowd at Turning Point USA’s annual conference in Arizona, Trump accused Panama of charging “exorbitant prices” to American shipping and naval vessels, framing the issue as a betrayal of fair trade practices.
“The fees being charged by Panama are ridiculous, highly unfair,” Trump said. “This complete rip-off of our country will immediately stop when I take office.” He further described the Panama Canal as a “vital national asset” for the U.S., signaling his intent to prioritize American economic interests in international agreements.
Trump’s remarks were met with a swift rebuttal from Panama’s President José Raúl Mulino, who firmly rejected the suggestion of U.S. interference. Mulino declared that “every square metre” of the canal and its surrounding area was sovereign Panamanian territory, adding that Panama’s independence was “non-negotiable.”
Historical Context and Strategic Importance
The Panama Canal, a 51-mile-long waterway linking the Atlantic and Pacific oceans, has been a cornerstone of global trade since its construction in the early 20th century. Originally built and controlled by the United States, the canal was gradually handed over to Panama following the 1977 Torrijos-Carter Treaties. Panama assumed full control of the canal in 1999, and since then, it has been a significant source of revenue and national pride for the Central American country.
With approximately 14,000 vessels passing through annually, the canal is critical to international commerce. Ships carry a variety of goods, including vehicles, natural gas, and military equipment. Trump’s comments reflect his perception of the canal as a strategic asset vital to U.S. economic and military interests, but they also evoke concerns about a potential shift in American foreign policy under his leadership.
Diplomatic and Political Ramifications
Trump’s rhetoric marks a rare instance of a U.S. leader suggesting the possibility of reclaiming foreign territory. While he did not outline specific measures for achieving such a goal, his comments hint at a more aggressive posture toward international relations.
Panama’s President Mulino and other officials have dismissed the demand as unrealistic, emphasizing the canal’s importance to Panamanian sovereignty. “Our nation will not be bullied or coerced,” Mulino stated.
Trump’s remarks also come at a time of heightened tensions with other nations. He criticized Canada and Mexico for “unfair trade practices” and accused them of allowing drugs and immigrants into the United States. However, he struck a cordial tone toward Mexico’s President Claudia Sheinbaum, whom he called “a wonderful woman.”
Turning Point USA and Trump’s Political Strategy
The Arizona event was hosted by Turning Point USA, a conservative activist group that played a pivotal role in mobilizing support for Trump during his 2024 election campaign. His speech, the first since a government funding deal passed Congress, avoided contentious domestic issues like the debt ceiling and instead revisited familiar campaign themes, including immigration, crime, and trade.
The audience of conservative activists responded enthusiastically to Trump’s proposals, which align with Turning Point’s emphasis on nationalism and economic conservatism. Critics, however, view his remarks as inflammatory and detrimental to diplomatic relations.
Broader Implications
Trump’s comments on the Panama Canal could signal a significant departure from traditional U.S. diplomacy. While they resonate with his supporters, they risk alienating international partners and complicating trade relations.
As Trump prepares to assume office, the world watches closely to see whether his fiery rhetoric will translate into concrete policy actions or if it will remain a hallmark of his populist appeal. Meanwhile, Panama has made clear its position: the canal is a sovereign asset, not a bargaining chip.
