President-elect Donald Trump's recent remarks that the United States should seek to reclaim the Panama Canal if "ridiculous" shipping fees are not reduced have stirred fresh controversy across both countries.
In speeches and on social media, Trump charged that Panama is "ripping off" American shippers and the U.S. Navy with skyrocketing tolls, warning, "we will demand that the Panama Canal be returned to us, in full, quickly and without question."
The statement, made in Arizona to supporters of conservative activist group Turning Point USA, raised concerns that U.S. foreign policy under Trump's incoming administration may deviate sharply from longstanding diplomatic norms.
Panama's President José Raúl Mulino responded firmly with a video message, emphasizing that "every square meter of the canal belongs to Panama and will continue to belong" to the Central American nation. Calling the canal a point of national pride, President Mulino reiterated that shipping tariffs "are not set on a whim" but rather by experts who account for operational costs and market factors. "Panamanians may have different views on many issues," he said, "but when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag."
Trump, who took to social media to post an image of a U.S. flag in the canal zone with the caption, "Welcome to the United States Canal!," doubled down on his accusations. "This complete rip-off of our country will immediately stop," he declared in a speech, referring to fees that can climb into six-figure sums for the largest vessels. The strong rhetoric has taken observers by surprise, as it is rare for a newly elected U.S. president to openly suggest taking over another country's strategic assets.
The Panama Canal was constructed by the United States in the early 1900s and handed over to Panamanian control on Dec. 31, 1999, under a treaty signed in 1977 by President Jimmy Carter. That agreement included provisions ensuring the canal's neutrality and fair access for global shipping. Fees vary according to the size and weight of vessels, not their national origin, with some of the biggest container ships incurring tolls up to $500,000. Nonetheless, Mr. Trump's supporters have pointed to the heavy volume of U.S.-bound commerce passing through the channel-75% of recent fiscal-year cargo was tied to the United States.
President Mulino, without explicitly naming Trump, noted that toll adjustments align with the canal's growing needs and expansion projects. He explained that improvements, including more extensive locks to handle larger ships, have been financed in part by raising shipping fees. "The tariffs are not set on a whim," he reiterated, pushing back against Mr. Trump's descriptions of Panamanian tolls as "highly unfair."
In response to the increased rhetoric from Washington, Panamanian officials have reminded international observers of their country's sovereignty over the canal. "Panama's sovereignty and independence were non-negotiable," President Mulino said, reaffirming his administration's stance. In his video address, he also cited the broad consensus among Panamanians regarding the waterway, a unifying symbol of national heritage.
Canal administrators have pointed out that the waterway's fees rose substantially over the past year to offset the impact of a severe drought in 2023. Reservoir levels declined, limiting the number of ships that could pass daily and prompting additional costs for scheduling and slot reservations. While rainfall has reportedly returned to normal levels more recently, canal officials warn that price hikes could persist into next year to maintain the expanded infrastructure and safeguard against future weather disruptions.
Trump first mentioned his dissatisfaction with Panama Canal fees on a Saturday post, calling the waterway a "vital national asset" for the United States. The following day, speaking in Arizona, he expanded his critique to include broader trade issues involving Mexico and Canada, claiming they have also taken unfair advantage of the United States. In the same address, he maintained that Mexican President Claudia Sheinbaum is a "wonderful woman," signaling that, despite tough talk, he still views diplomatic ties in a positive light-under certain conditions.
Meanwhile, geopolitical analysts suggest that Trump's stance on the canal illustrates a desire to project strong American influence abroad, particularly in trade and infrastructure matters. Observers note that the 51-mile waterway remains a key military and commercial route, and any escalation of tensions could have far-reaching consequences for global shipping markets. The canal's role in facilitating the movement of energy and consumer goods between the Atlantic and Pacific underscores its economic and strategic importance.
