Introduction

The Panama Canal has a rich history spanning over a century, and recent comments by President-elect Donald Trump have brought it back into the spotlight. Here’s an overview of the canal’s history and the current situation:

Historical Background

The idea of a canal across Panama dates back to 1513 when Spanish conquistador Vasco Núñez de Balboa first crossed the Isthmus of Panama. However, it wasn’t until the late 19th century that serious efforts to build the canal began.

French Attempt

In 1880, the French, led by Ferdinand de Lesseps, initiated the first major effort to construct the canal. Unfortunately, this attempt failed due to financial troubles and tropical diseases.

U.S. Involvement

In the early 1900s, President Theodore Roosevelt made the canal a priority for the United States. The U.S. supported Panama’s independence from Colombia in 1903, which led to the signing of the Hay-Bunau-Varilla Treaty, granting the U.S. control over a 10-mile wide strip of land for canal construction.

Construction and Completion

The U.S. began construction in 1904, and the canal was completed in 1914. This achievement solidified the U.S.’s reputation as a leader in engineering and technology.

Transfer of Control

The United States maintained control of the canal until the late 20th century:

In 1977, the Torrijos-Carter Treaties were signed, initiating the process of transferring control to Panama.

On December 31, 1999, Panama took full control of the canal’s operation, administration, and maintenance.

Current Situation

President-elect Donald Trump has recently made statements threatening to retake control of the Panama Canal:

Trump criticized the fees imposed by Panama, calling them “ridiculous” and “exorbitant”.

He suggested that if the fees aren’t reduced, the U.S. will “demand that the Panama Canal be returned to us, in full, swiftly and without hesitation”.

Trump also raised concerns about China’s increasing influence in the region.

Impact on U.S. Trade

While the U.S. is not directly losing revenue, these issues do affect U.S. commerce:

Approximately 75% of cargo passing through the canal is either destined for or originated from the U.S.

The canal handles about $270 billion in U.S. cargo annually

It’s important to note that the canal’s customers are ship operators and owners, not countries. The ACP cannot provide special rates for U.S. cargoes due to the Neutrality Treaty.

Reasons for Trump’s Threats

Rising Fees: Trump claims that Panama is imposing excessive charges on American shipping and naval vessels.

Water Scarcity: The canal is facing challenges due to drought conditions, which have led to restrictions on ship traffic and increased fees.

China’s Influence: Trump has expressed concerns about China’s growing presence in the region, although Panama’s president denies any Chinese control over the canal.

Reactions and Analysis

Panama’s President José Raúl Mulino firmly stated that “every square meter” of the canal belongs to Panama and is non-negotiable.

Experts note that there is no legal mechanism for the U.S. to reclaim control of the canal under normal circumstances.

The situation has raised concerns about potential shifts in U.S. foreign policy and diplomatic relations.

Conclusion

It’s important to note that the Panama Canal remains a critical asset for global maritime trade, with approximately 14,000 vessels transiting annually. The current dispute highlights the complex interplay of historical agreements, economic interests, and geopolitical concerns surrounding this vital waterway