Trump's remarks on Panama Canal spark global controversy: WSJ

By Al Mayadeen English
Source: Wall Street Journal
25 Dec 2024 20:47
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Trump's comments have raised questions about what actions he might take, with critics questioning whether he is contemplating drastic measures such as a military intervention.

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FILE - A cargo ship traverses the Agua Clara Locks of the Panama Canal in Colon, Panama, September 2, 2024. (AP)

The Wall Street Journal reported on Wednesday that President-elect Donald Trump has stirred debate with his recent comments about the Panama Canal, suggesting that Panama had been unfairly charging excessive tolls and demanding the canal's return to US control. Speaking to supporters in Phoenix over the weekend, Trump criticized Panama's handling of the canal and implied potential repercussions if his demands were not met.

"Our Navy and commerce have been treated in a very unfair and injudicious way. The fees being charged by Panama are ridiculous, highly unfair, especially knowing the extraordinary generosity that has been bestowed to Panama—I say, very foolishly, by the United States," Trump stated. He added, "We will demand that the Panama Canal be returned to the United States of America in full, quickly and without question. I'm not going to stand for it. So to the officials of Panama, please be guided accordingly."

Panama's President José Raúl Mulino quickly responded, rejecting Trump's assertions and vowing to defend Panama's interests. Trump, in turn, responded on Truth Social with a brief retort: "We'll see about that."

Trump's comments have raised questions about the actions he might take, with critics questioning whether he is contemplating drastic measures such as military intervention.

Despite the accusations, the Panama Canal Authority (PCA), which oversees the canal's operations, maintains a fair toll system based on vessel size, weight, and type. Fees apply equally to all ships regardless of their country of origin. According to experts, the PCA has successfully operated the canal since its transfer from the US in 1999, functioning as an independent business entity separate from government control.

Canal challenges

Jorge Quijano, a former administrator of the PCA, explained that the authority faces significant challenges, such as the effects of a prolonged drought in 2023 that impacted operations and resulted in an estimated $1 billion loss in revenue. Quijano also noted that building additional reservoirs to mitigate water shortages could cost over $2 billion, underscoring the need for the canal's current market-based pricing strategy.

The PCA has also implemented measures to address operational challenges, including an online auction system for priority access to the canal during high demand. This system allows those willing to pay higher fees to transit faster while providing alternatives for others, such as routes through the Suez Canal or around the Cape of Good Hope.

Analysts suggest Trump's comments may stem from broader concerns over geopolitical dynamics in Latin America, particularly China's influence. Chinese-linked firms operate two of the canal's five cargo ports, a factor that has raised eyebrows in Washington. However, experts caution that Trump's rhetoric risks escalating tensions unnecessarily.