President-elect Donald J. Trump this week escalated his threats to retake control of the Panama Canal, falsely accusing Panama of allowing Chinese soldiers to control the vital shipping route and of overcharging American ships.
Mr. Trump has claimed Panama charges U.S. vessels “exorbitant prices” and warned that if they are not reduced after he takes office next month, he will demand that the United States be granted control of the canal “in full, quickly and without question.”
On Wednesday, Mr. Trump went on another tear. Announcing his choice for ambassador to the central American nation, Kevin Marino Cabrera, he accused the Panamanian government of “ripping us off on the Panama Canal, far beyond their wildest dreams.” In a holiday screed on his social media site, Truth Social, Mr. Trump wished a merry Christmas to “the wonderful soldiers of China” whom he inaccurately said were operating the canal, and griped that the United States “puts in Billions of Dollars” for canal maintenance “but will have absolutely nothing to say about ‘anything’.”
While it is unclear what prompted Mr. Trump’s recent obsession with the Panama Canal, some Republicans have long objected to turning it over to Panamanian control. When Ronald Reagan ran for president, he said the people of the United States were the canal’s “rightful owners” and brought audiences to their feet with the line: “We bought it; we paid for it; we built it.”
The United States under President Jimmy Carter’s administration entered into two treaties, culminating in formally turning over control of the canal to the Panamanians on Dec. 31, 1999.
“There’s a certain wing of the Republican Party that’s always been skeptical of the handover,” said Ryan C. Berg, the director of the Americas program at the Center for Strategic and International Studies, a Washington think tank.
“Complaints tend to crop up around the anniversary, and now that seems to be coming to a head because of the China issue and the desire to compete with China in the region,” he said.
Here’s three important things to know about the Panama Canal as the issue moves forward.
Who Owns the Panama Canal?
The Panama Canal was built by the United States between 1904 and 1914, and the U.S. government managed it for several decades. That situation created significant tensions with Panama over the years, and in 1964, anti-American riots broke out in the canal zone.
The riots led to the renegotiation of the Panama Canal treaties, and in 1977 Mr. Carter and the Panamanian leader Omar Efraín Torrijos signed the Torrijos-Carter Treaties. The pair of agreements guaranteed the permanent neutrality of the Panama Canal. After a period of joint custody, the treatise called for the United States to relinquish control over the canal by the year 2000.
Panama took full control in 1999, and has since operated the canal through the Panama Canal Authority.
In a statement of rebuke to Mr. Trump on Sunday, President José Raúl Mulino of Panama said “every square meter of the Panama Canal and its adjacent area belong to PANAMA.”
Are U.S. Vessels Being Overcharged?
Mr. Mulino says they are not.
Rates being charged to ships and naval vessels, he insisted, are “not on a whim.”
Panamanian officials said all countries are subject to the same fees, though they would differ based on ship size. They are established in public meetings by the Panama Canal Authority, and take into account market conditions, international competition, operating and maintenance costs, Mr. Mulino said.
Rates have gone up recently, however. That’s because starting in 2023, Panama experienced severe drought, driven by a combination of El Niño and climate change. With water levels at Gatun Lake, the principal hydrological reserve for the canal, at historically low levels, authorities reduced shipping through the canal to conserve the lake’s fresh water.
Mr. Trump has called climate change a hoax.
Does China control the Panama Canal?
Chinese soldiers are not, as Mr. Trump has claimed, “operating” the Panama Canal.
“There are no Chinese soldiers in the canal, for the love of God,” Mr. Mulino said in a speech Thursday. “The world is free to visit the canal,”
A Hong Kong-based firm, CK Hutchison Holdings, does manage two ports at the canal’s entrances. And some experts have said that does raise valid competitive and security concerns for the United States because Hong Kong is now part of China.
For example, Mr. Berg noted, the company would likely have data on all ships coming through the Panama Canal, giving it a data advantage. China also has been using its shipping and maritime operations to gather foreign intelligence and conduct espionage.
“China exercises, or could exercise, a certain element of control even absent some military conflagration,” Mr. Berg said. “I think there is reason to be worried.”
Mao Ning, a spokeswoman for the Chinese foreign ministry, said Tuesday that China “will as always respect Panama’s sovereignty” over the Panama Canal.
China is the second-largest user of the Panama Canal after the United States. In 2017, Panama cut diplomatic ties with Taiwan and recognized it as part of China, a major win for Beijing.
Can the United States Reassert Control?
Not easily.
Mr. Mulino has made clear the Panama Canal is not for sale. He noted that the treaties established permanent neutrality of the canal and “guaranteeing its open and safe operation for all nations.” And the Senate ratified the Panama Canal treaties in 1978.
Mick Mulvaney, Mr. Trump’s former chief of staff, suggested that the provocations were merely part of a negotiating tactic to get rates down.
“You know, I don’t envision American troops going in to retake the canal, but you got to think that someone is out there scratching their head going, ‘Is Donald Trump crazy enough to do something like that?’” Mr. Mulvaney said Tuesday on “The Hill” on NewsNation.
Mr. Berg said the neutrality agreement made it unlikely that Panama would even be able to grant special rates to the United States. And, he noted, Mr. Mulino is “incredibly pro-American” and likely eager to help the incoming Trump administration deal with issues like illegal immigration.
“President Mulino is going to be a great ally with the United States,” Mr. Berg said. “We should not want this to devolve into some kind of political fight because we’re going to need President Mulino on a number of other issues.”
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