The Panama Canal, as one of the most important arteries of international trade, plays a strategic role in global maritime transportation. Constructed by the United States (US) and transferred to Panama in 1999, this transit point has been managed under Panama’s sovereignty for years. However, the threat by the newly elected U.S. President Donald Trump to retake control of the canal has strained relations between Panama and the U.S., sparking an international debate.
The Panama Canal provides a maritime passage that connects the Atlantic and Pacific Oceans, facilitating 5% of world trade.[1] In 1977, agreements signed between U.S. President Jimmy Carter and Panamanian leader Omar Torrijos transferred control of the canal to Panama in 1999, thereby recognizing Panama’s sovereignty rights on an international level.[2] Today, the United States is one of the main users of the channel, while China holds a significant share with a 21% trade volume.[3]
From the perspective of U.S. geopolitical interests, the Panama Canal plays a critical role in balancing China’s increasing influence and maintaining strategic superiority in Latin America. In this context, Trump’s recent statements can be interpreted as an effort to restore U.S. regional dominance.
Trump, demanding the return of control of the Panama Canal to the U.S., described the transit fees Panama charges U.S. ships as “excessive” and “unfair,” and also expressed concern over China’s increasing influence over the canal.[4] Saying “Panama is robbing us,” Trump intensified his criticisms, stating that they would take back control of the canal if the principles were not applied correctly in a moral and legal manner.[5]
In response to these statements, Panama’s President José Raúl Mulino emphasized that the canal is a symbol of Panama’s independence and that sovereignty is non-negotiable, firmly rejecting the issue by stating, “The Panama Canal belongs to Panamanians and will remain so.”[6] These mutual statements have created a diplomatic tension between the two countries and indicated that Trump’s populist rhetoric in the region poses challenges from an international law perspective.
The validity of Trump’s request under international law is debatable. The 1977 agreements have regulated the transfer of the canal in a permanent and irreversible manner. Any claim by the US over the canal would be a difficult endeavor to accept by the international community. Additionally, during a period when Panama is caught between the US and China, the neutrality and security of the canal have become critical issues.
The statement in the 1977 Torrijos-Carter Treaty-related Memorandum of Understanding, “The right of the U.S. to take action to ensure the Canal remains open, secure, and accessible shall not be construed as an intention to intervene in Panama’s internal affairs,” provides a restrictive framework for intervention. However, the broad interpretation by the U.S. of a situation threatening the Canal’s security leaves open the potential to use the right to intervene as a political maneuver.[7]
It is also a matter of curiosity how Kevin Marino Cabrera, appointed as the U.S. diplomatic representative in the region, will manage relations with Panama in the face of Trump’s harsh rhetoric. Cabrera, while preparing to act within the framework of the “America First” principles, this situation could create a long-term distrust between Panama and the USA.
The US-China rivalry has been concretely manifested in the Trump administration’s harsh statements regarding the Panama Canal. These statements serve as a warning against China’s increasing influence in Latin America. China developed diplomatic relations with Panama in 2017, after severing ties with Taiwan, and this was criticized by the Trump administration in the United States. Although Panamanian officials have firmly denied the claim that Trump increased China’s influence over the canal, these statements clearly reflect the echoes of the US-China rivalry over the canal.
The Trump administration’s rhetoric regarding the Panama Canal has not only targeted China but is also seen as a reflection of the U.S.’s oppressive stance towards its allies. Threats to the canal’s independence could negatively impact global trade volume and cause changes in maritime shipping routes. Especially considering the competition between the US and China, discussions over the canal could create uncertainties in the international trade system.
The United States’ repressive stance towards Panama could create a ripple effect on the diplomatic balances in the region. For the people of Panama, the independence of the Canal is seen as a symbol of national identity. Trump’s statements could lead to a strong nationalist reaction among the Panamanian people, causing deeper rifts in relations with the United States. Additionally, this situation could lead to a decrease in U.S. influence across Latin America and prompt regional countries to seek alternative collaborations.
The Panama Canal, as the intersection of global trade and geopolitical competition, has become a matter reflecting the fundamental dynamics of international relations. Trump’s statements can be seen as an effort to redefine the United States’ understanding of global leadership. However, such populist and harsh rhetoric can create deep cracks in diplomatic relations. Panama’s reactions and the international community’s approach will be the key factors determining how this discussion will evolve.
If Washington does not adopt a more constructive and mutually respectful policy in its relations with allies in the region, this tension could undermine not only the relationship between the two countries but also the overall diplomatic balance in Latin America. This approach could lead Latin American countries to lose trust in the U.S., prompting them to seek alternative alliances. Such a scenario could negatively impact both economic cooperation and regional stability, potentially leading to a long-term diplomatic and commercial crisis.
[1] “‘Nothing to Talk About’: Panama President Dismisses Trump’s Threats over Canal”, The Guardian, www.theguardian.com/world/2024/dec/27/donald-trump-panama-canal-president-threat-jose-raul-mulino, (Accessed Date: 12.28.2024).
[2] Fields, Ashleigh. “Trump Announces Ambassador to Panama amid Fight over Canal”, The Hill, www.thehill.com/homenews/administration/5056094-trump-ambassador-panama-canal/, (Accessed Date: 12.28.2024).
[3] “Nothing to Talk About’: Panama President Dismisses Trump’s Threats over Canal”, Ibid, (Accessed Date: 12.28.2024).
[4] Ashleigh Fields, Ibid, (Accessed Date: 12.28.2024).
[5] Gram Slattery, “Trump Threatens to Retake Control of Panama Canal”, Reuters, www.reuters.com/world/americas/trump-says-he-might-demand-panama-hand-over-canal-2024-12-22/, (Accessed Date: 12.28.2024).
[6] “Panama President Rules Out Talks with Trump over Canal Threat”, Voice of America, www.voanews.com/a/panama-president-rules-out-talks-with-trump-over-canal-threat-/7915162.html, (Accessed Date: 12.28.2024).
[7] U.S. Department of State. Panama Canal Treaty of 1977. Archive, https://2001-2009.state.gov/p/wha/rlnks/11936.htm, (Accessed Date: 12.28.2024).
