What’s the history of the Panama Canal, and why is Trump threatening to retake control of it?

U.S. President-elect Donald Trump has continued to suggest that the United States should regain control of the Panama Canal, an idea rejected by the Panamanian government, which has controlled the waterway for decades. In social media posts and speeches to supporters, Trump has accused Panama of charging the U.S. "excessive fees" to use the canal and has implied that China is increasing its influence over the critical waterway. At a press conference at Mar-a-Lago on Tuesday, he stated that the U.S. handing over control of the canal nearly half a century ago was "a bad thing."

The Panama Canal, built by the U.S., opened in 1914 and was controlled by the United States until a 1977 agreement stipulated its eventual transfer to Panama. The two countries jointly operated the canal until the Panamanian government gained full control after 1999. Last month, while speaking to a group of young conservatives in Phoenix, Trump stated that if the spirit of the agreement was not being upheld, "then we're going to ask for the Panama Canal back. So, Panama officials, please act accordingly."

It is unclear how serious Trump is about his threat to reclaim control of the canal. The President-elect has not explained how he would force a sovereign, friendly nation to cede its territory, and on Tuesday, he refused to rule out using force to regain control of the canal. The Panamanian government, for its part, wants nothing to do with Trump's suggestion. "As President, I want to make it clear that every inch of the Panama Canal and its adjacent areas belongs to Panama and will continue to belong to Panama," President Jose Raul Mulino said in a statement last month. "The sovereignty and independence of our country are not negotiable," he added.

Ricaurte Vásquez Morales, the administrator of the Panama Canal Authority, told the Wall Street Journal on Wednesday that Trump’s claims about China exerting influence over the canal were “baseless” and denied that U.S. ships were being charged higher fees. “The rules are the rules, there are no exceptions,” Vásquez Morales said. “We cannot discriminate against Chinese, Americans or anyone else. That would violate the neutrality treaty, international law, and cause chaos.”

Before the canal was built, ships traveling to and from the east and west coasts of the Americas had to navigate around Cape Horn at the southern tip of South America, adding thousands of miles and months to their voyages. Creating a passage that would shorten the journey had been a goal of several empires that had colonies in the Americas. In the early 20th century, President Theodore Roosevelt made completing a passage a priority. At the time, the territory was controlled by the Republic of Colombia, but after a U.S.-backed rebellion resulted in Panama breaking away from Colombia and forming the Republic of Panama in 1903, the U.S. signed a treaty with the newly formed republic that allowed the U.S. to control a 10-mile wide strip of land to build the canal in exchange for financial compensation.

The canal was completed in 1914, solidifying the United States’ status as an engineering and technological superpower, but it came at a great human cost. It is estimated that approximately 5,600 people died during the U.S. construction of the canal. The canal’s usefulness was demonstrated during World War II when it was used as a critical passage for Allied forces fighting in the Atlantic and Pacific. However, relations between the U.S. and Panama gradually broke down due to disagreements over control of the canal, the treatment of Panamanian workers, and whether both the U.S. and Panamanian flags should be flown jointly in the Canal Zone.

Those tensions came to a head on January 9, 1964, when anti-American riots resulted in several deaths in the Canal Zone and a brief severing of diplomatic ties between the two countries. After years of negotiations, and in order to reach a more equitable agreement, two treaties were signed during the administration of President Jimmy Carter. The agreements declared the canal neutral and open to all ships and stipulated that the U.S. and Panama would jointly control the territory until the end of 1999, at which time Panama would gain full control. “The people of Panama were resentful of the treaty because we controlled a 10-mile wide strip of land through the heart of their country, and because they felt the original treaty terms were unfair,” Carter said in an address to Americans after signing the treaties. “It was drafted in our country without any Panamanian signature.”

The then-President added, “Certainly this does not give the United States any right to intervene in the internal affairs of Panama, nor will our military actions be directed against the territorial integrity or political independence of Panama.” Not everyone supported Carter’s plan. In a 1976 speech, then-presidential candidate Ronald Reagan stated that the “American people” were the “rightful owners of the Canal Zone.” Tensions over the canal flared up again in the late 1980s under the rule of Manuel Noriega, who was ousted after the U.S. invaded Panama as part of a “war on drugs.”

Shortly after Panamanians gained full control of the canal in 2000, traffic quickly outpaced the waterway’s capacity. A massive expansion project began in 2007 and was completed nearly a decade later. However, the area around the canal has suffered severe droughts, resulting in reduced water levels that have hindered its normal operation. Canal authorities have imposed restrictions on traffic and charged higher fees for ships traversing the canal. These fees appear to be part of Trump’s grievances over the canal. The President-elect called the fees “ridiculous” and “highly unfair, especially after knowing the extraordinary generosity the U.S. very stupidly gave to Panama” last month.

Another of Trump’s claims, that China is seeking to exert more control over Panama and the Canal Zone, is not without merit. In 2017, Panama signed a joint communique emphasizing that it would not maintain any official relations with Taiwan, an autonomous democracy that China’s ruling Communist Party claims as its own. Since then, China’s influence in the area around the canal has grown. Responding to Trump’s remarks at the time, Panamanian President Mulino stated that “the rates are not a whim.” He also dismissed the idea that China exercises overt control over the canal. “The canal is not under any control, neither directly nor indirectly, neither by China nor by the European community, nor by the United States, nor by any other power,” Mulino said in his statement.

Trump’s remarks are the latest example of the President-elect expressing a desire to acquire, threaten to take, or encroach upon territory belonging to friendly foreign nations. Since being elected last November, Trump has taunted Canadian Prime Minister Justin Trudeau by suggesting that Canada should become the 51st state in the U.S. During his first term, Trump repeatedly floated the idea of the U.S. purchasing Greenland from Denmark. The island’s government stated that it was “not for sale.”