Trump Threatens to Reclaim Panama Canal, Alarming the Nation’s Leaders

Panama’s iconic canal, a vital global maritime asset, faces renewed tensions as Donald Trump vows to bring it back under U.S. control.

Historic Marvel in the Crosshairs Again

Over a century after its completion and 25 years after its return to Panama, the Panama Canal is at the center of a political storm. In his inaugural address, President Donald Trump claimed Panama overcharges the U.S. Navy and suggested the canal is under Chinese influence—a statement Panama has strongly denied. Trump's declaration, “We are taking it back!” has sparked alarm in Panama and beyond.

The canal is integral to Panama’s economy, generating $5 billion in profits in 2024 and contributing over 23% of the nation’s annual income. With about 5% of global maritime traffic passing through the waterway, any U.S. intervention could have profound geopolitical and economic consequences.

A Troubled History of U.S. Involvement

The Panama Canal was born from “gunboat diplomacy” in 1903 when the U.S. backed Panama’s independence from Colombia to secure rights to build and control the canal. The arrangement left Panama divided and excluded from the canal’s benefits, fueling resentment and protests.
The canal was officially handed back to Panama on December 31, 1999, under a historic agreement between U.S. President Jimmy Carter and Panamanian leader Omar Torrijos. However, the U.S. retained the right to intervene militarily to ensure the canal’s operation—a clause that Trump could potentially exploit.

Panama Stands Firm

Panama’s leaders have firmly rejected Trump’s remarks. President José Raúl Mulino stated, “The canal is and will remain Panamanian,” emphasizing that its administration is crucial to the nation’s sovereignty and economy.

Jorge Luis Quijano, a former Panama Canal administrator, highlighted Panama’s $5 billion investment in the canal’s expansion, which doubled its capacity and generates over 55% of current canal revenues. “We paid for it, we built it,” he said, dismissing Trump’s claims of U.S. entitlement.

Economic Lifeline and Political Stability

The Panama Canal’s expansion has solidified the country as a rare success story in Central America, providing stability, employment, and revenue amid a region plagued by poverty and drug trafficking. Any threat to the canal’s sovereignty is seen as an attack on Panama’s lifeline.

Panama has warned against any U.S. attempt to reclaim the canal, likening it to “threatening to take oil from Saudi Arabia.” The specter of intervention has alarmed Panamanians, who view the canal as their national pride and economic backbone.

The Panama Canal, a symbol of resilience and progress, stands firm against renewed U.S. claims. As the world watches, Panama’s defiance underscores the significance of sovereignty in an increasingly interconnected world.