US President-elect Trump warned on Sunday that if Panama does not change its unfair toll practices on the Panama Canal, the US will demand the return of control over the canal as it was built and gifted by the US in the Central American country.
The Panama Canal is an 82-kilometer (51-mile) artificial waterway that traverses Panama to connect the Pacific and Atlantic Oceans, allowing ships to save thousands of miles and weeks of travel time by avoiding the stormy and icy South American southern tip when going from Los Angeles to New York.
The canal has been a crucial global shipping route that has facilitated international trade and navigation since it opened in 1914. Throughout history, there were attempts by Spain and France to construct a canal across the narrowest part of Central America to establish a passage between the two major oceans.
In the early 20th century, tensions between the US and Panama grew over control of the canal, leading to protests against US dominance. In 1977, a treaty was signed between US President Jimmy Carter and Panamanian military leader Omar Torrijos, granting Panama free control over the canal and ensuring its perpetual neutrality.
The treaty came into effect on December 31, 1999, and since then, the canal has been managed by the Panama Canal Authority, serving as a significant source of revenue for the country. In recent years, water supply issues due to drought have led to restrictions on canal traffic to balance the water needs of Panamanians.
On the other hand, CK Hutchison Holdings, a subsidiary of the Hong Kong-based Cheung Kong Group, has been managing two ports near the entrance of the Panama Canal.
Trump’s warning comes as he criticizes the high toll fees and concerns about Chinese influence posing risks to the canal’s operations.
Regarding the canal, Trump stated, “It was a special gift to Panama and the people of Panama, but it had terms. If the morals and legal principles governing this generous gesture are not respected, we will demand the swift and unequivocal return of the Panama Canal to us,” he said.
Panamanian President José Raúl Mulino rejected Trump’s warning, emphasizing that the canal tolls have been assessed carefully and transparently to maintain the infrastructure, which was expanded in 2016 to boost transportation and global trade.
Mulino asserted in a statement on Sunday, “Every square meter of the Panama Canal and its surrounding areas belong to Panama and will continue to be Panama’s. Our sovereignty and independence are non-negotiable.”
“The canal is not under the direct or indirect control of China, the European Union, the US, or any other power,” he added.