Panama’s President José Raúl Mulino strongly rejected President-elect Donald Trump‘s suggestion to return the Panama Canal to U.S. control, highlighting potential tensions that could affect maritime trade through the critical waterway.
What Happened: “Every square meter of the Panama Canal and its adjacent zone belongs to Panama, and will continue to do so,” Mulino said in a video statement on Sunday.
His response came after Trump told supporters at Turning Point’s “American Fest” that he would demand the canal’s return to U.S. control, citing concerns over fees and fair treatment, reported The Hill.
"It was given to Panama and to the people of Panama, but it has provisions. You got to treat us fairly and they haven't treated us fairly," Trump said.
The Panama Canal, transferred to Panamanian control in 1999, serves as a crucial maritime route connecting the Atlantic and Pacific oceans. The waterway handles approximately 12,000 vessel transits annually and is particularly vital for U.S. East Coast ports, which have seen stronger cargo growth since the canal’s 2016 expansion.
Mulino defended the canal’s fee structure, explaining that rates “are established publicly and in an open hearing, taking into account market conditions, international competition, operating costs, and maintenance needs.”
Why It Matters: The canal’s significance to U.S. trade is substantial. According to FreightWaves data, shipping costs from Asia to U.S. East Coast ports via the canal are approximately $1,400 higher per standard forty-foot container compared to West Coast routes, reflecting the waterway’s strategic importance in global trade.
Recent challenges include climate-related issues, with the Panama Canal Authority implementing additional fees due to historically low water levels. In 2019, total rainfall dropped 20%, affecting the Gatun and Madden Lakes that supply the canal.
Despite the diplomatic tension, Mulino expressed hope for maintaining strong bilateral relations with the incoming Trump administration, particularly on security issues like illegal migration and drug trafficking. However, he emphasized that Panama’s sovereignty over the canal is “not negotiable.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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