In his inaugural address, U.S. President Donald Trump vowed to "take back" the Panama Canal, claiming that the vital trade route had fallen under Chinese control. Trump reiterated his pre-inauguration threats on Monday to regain control of the Panama Canal, accusing Panama of violating the promises it made when the strategic waterway was finally handed over in 1999. Panama has strongly denied these accusations.
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02-13, 2025Trump also expressed his displeasure with the "exorbitant" fees charged to the U.S. government, navy, and businesses for using the canal. "We didn't give it to China, we gave it to Panama, and we're taking it back," Trump said minutes after being sworn in for his second four-year term. This is not the first time the U.S. president has expressed a desire to control other territories or rename them.
The Panama Canal is a lock-type canal owned and administered by the Republic of Panama. It connects the Atlantic and Pacific oceans through the narrow Isthmus of Panama. The canal is 65 kilometers long, or about 82 kilometers from deep water in the Atlantic (more specifically, the Caribbean Sea) to deep water in the Pacific. Completed in August 1914, the canal is one of the two most important strategic man-made waterways in the world, the other being the Suez Canal. By using the canal, ships traveling between the east and west coasts of the United States can shorten their journey by about 15,000 kilometers, which they would otherwise be forced to travel around Cape Horn in South America.
Since 1999, the Panamanian government has had full jurisdiction and control over the waterway. The U.S. largely built the canal and managed the territory around the passage for decades. In the 20th century, U.S. control of the waterway was a point of contention for Panamanians, who believed the country should have control over the passage. On January 9, 1964, students protested in the then-U.S.-controlled Canal Zone for not being allowed to raise the Panamanian flag at a high school there. The protests expanded into general opposition to the U.S. presence in Panama. U.S. troops intervened, resulting in the deaths of 28 people. It is now commemorated in Panama as Martyr's Day. In 1977, the U.S. and Panama signed two treaties paving the way for the canal to return to full Panamanian control. The U.S. handed it over in 1999 after a period of joint administration.
In December 1989, the U.S. invaded Panama in an operation called Operation Just Cause to remove the country's dictator, General Manuel Noriega. The invasion led to his arrest and extradition to the U.S. to face charges of money laundering and drug trafficking. This followed a decade of strained relations between the two countries. The fees for ships using the passage are set by the Panama Canal Authority. In recent years, fees have skyrocketed due to droughts in the region. In 2023, rainfall in Panama fell by 30% to 50%, and the waterway began to dry up. In response, the government reduced maximum ship weights and daily ship transits in an effort to conserve the canal's water resources. In 2024, the Authority allowed more ships to use the canal, easing congestion, but also increasing tolls and introducing some additional fees on January 1st. The Panamanian president says prices have not increased, but Trump disagrees.
China does not own the Panama Canal. However, a Hong Kong-based company has been operating two ports of the canal since 1997, one at the Caribbean and one at the Pacific entrances. The company is part of Hutchison Ports, a subsidiary of Hong Kong-based CK Hutchison Holdings, which operates the Balboa and Cristobal ports at either end of the canal. In response to the allegations, the Panamanian Comptroller General's Office, which oversees public entities, announced that it would launch "a thorough audit" aimed at ensuring that Panama Ports Company is "efficient and transparent in the use of public resources." The Comptroller's Office said the aim was to determine whether the company had complied with its concession agreement, including properly reporting revenues, payments, and contributions to the state. Panamanian President Jose Raul Mulino denied that any other country was interfering with the canal, and said it was being operated under neutral principles.
It is not clear how Trump would seek to regain control of the canal, and he would have no recourse under international law if he decided to take action against the passage. The U.S. think tank, the Atlantic Council, believes that one way for the U.S. to regain some control of the canal would be through investment. "One option would be to increase U.S. investment in the canal, as well as in the many businesses that directly and indirectly support canal operations," the organization's Jason Marczak wrote in an article published on its website. "The new government in Panama is more pro-American than its predecessor. Mulino, who took office in July 2024, has made a great effort to bring Panama's policies more closely in line with U.S. positions and is a ready partner to accelerate U.S. investment in Panama. Recently, in Panama, I have seen and heard a desire for a disproportionate increase in Chinese investment and for more U.S. companies to invest in Panama, from its technology sector to its maritime industry," he said.
There is evidence that Trump has long believed that the U.S. was "ripped off" when it handed control back to Panama. According to the think tank, the Atlantic Council, Trump's interactions with Panama peaked in 2018, when a legal dispute arose between the Trump Organization and a Miami-based hotel investor who was trying to disassociate from Trump's business. The situation escalated into a standoff with Panamanian authorities, and eventually, Trump's name was removed from the hotel at the center of the dispute. Panama also notified the United Nations of Trump's remarks in a letter seen by Reuters. Mulino dismissed Trump's remarks, saying, "No country in the world interferes with our management." Panama's ambassador to the UN, Eloy Alfaro de Alba, pointed out that under the UN's founding charter, countries "shall refrain in their international relations from the threat or use of force against the territorial integrity or political independence of any state."
Trump has also vowed to rename the Gulf of Mexico the Gulf of America. Shortly after being sworn in, he signed an executive order to rename the Gulf of Mexico. Trump can do this, but only domestically. The executive order only changes what the U.S. calls the basin, but that does not mean the rest of the world has to follow suit. Last December, Trump repeatedly mused about making Canada a U.S. state, although it is unclear how serious he was about the matter. On Monday, he also reiterated his interest in controlling Greenland, an autonomous territory of Denmark, saying the U.S. needs to control it to ensure international security. He made the comments while signing executive orders in the Oval Office on his first day of his second term as president. He did not rule out using military or economic force to persuade Denmark to hand over the island. Greenland's Prime Minister, Mute Egede, has stepped up his efforts for independence, and has repeatedly said the island is not for sale and its future will be decided by its people.
