In his inaugural speech, President Donald Trump sparked international controversy by declaring his intention to “take back” the Panama Canal. Framing the current arrangement as a betrayal of American interests, Trump’s bold words have drawn strong reactions from Panama and its President José Raúl Mulino. Trump’s claims have reignited debates over sovereignty, history, and the delicate balance of U.S.-Panama relations.

President Trump’s argument centers on his belief that the United States was wrong to relinquish control of the Panama Canal under the Torrijos-Carter Treaty signed in 1977. “American ships are being severely overcharged and not treated fairly in any way, shape, or form, and that includes the United States Navy,” he declared during his inaugural address. Trump also emphasized concerns over foreign influence, stating, “Above all, China is operating the Panama Canal, and we didn’t give it to China—we gave it to Panama, and we’re taking it back.”

Trump’s rhetoric casts him as a defender of U.S. economic and strategic interests, seeking to rectify what he views as a grave mistake in handing over such a critical trade route. His concerns are not without merit: the canal facilitates 40% of U.S. container traffic and handles approximately 5% of global maritime trade, making it a vital artery for both commerce and national security.

Panama’s Firm and Defiant Response

Panama’s President José Raúl Mulino wasted no time responding to Trump’s statements. In a strongly worded post on social media platform X (formerly Twitter), Mulino asserted, “The canal was not a concession from anyone. It was the result of generational struggles that culminated in 1999.” His message emphasized that the canal’s control is a source of national pride, symbolizing the end of decades of foreign oversight.

Mulino further rebuked Trump’s claims of Chinese control, stating there is “no presence of any nation in the world that interferes with our administration.” Panama’s stance is unequivocal: the canal is and will remain under Panamanian control, governed by the principles of neutrality established in the Torrijos-Carter Treaty.

The canal’s success under Panamanian administration bolsters this position. In 2024 alone, the canal generated nearly $5 billion in revenue, accounting for 23.6% of Panama’s annual income. The nation has also invested heavily in modernizing the canal, completing a $5 billion expansion project in 2016 that more than doubled its capacity. “We paid for it, we built it,” former canal administrator Jorge Luis Quijano said, “and right now, over 55% of the revenues of the Panama Canal are coming from that investment, not from the U.S. investment they made so long ago.”

The history of U.S.-Panama relations regarding the canal is fraught with tension. Constructed by the United States in the early 20th century, the Panama Canal was a monumental engineering feat—and a symbol of American power. However, it was also a source of resentment for Panamanians, who viewed the U.S.-controlled Canal Zone as a colonial imposition that divided their country in half.

Protests against U.S. control reached a boiling point in the 1960s. In January 1964, riots erupted when Panamanian students attempted to raise their national flag in the U.S.-controlled Canal Zone. The resulting violence left 22 Panamanians and four U.S. Marines dead, fueling demands for change. These tensions culminated in the 1977 Torrijos-Carter Treaty, which established a phased handover of the canal to Panama, completed on December 31, 1999.

Mulino’s response to Trump’s comments underscores the significance of this history. He described the canal as “the result of generational struggles,” pointing to decades of effort and sacrifice by Panamanians to reclaim control of their most valuable national asset. “Since then, for 25 uninterrupted years, we have administered and expanded it responsibly to serve the world and its trade, including the United States,” Mulino said.

Trump’s Allegations and the China Question

Central to Trump’s argument is the claim that China wields undue influence over the canal. While it is true that Chinese companies operate ports at both ends of the waterway—through long-term agreements signed in the 1990s—Panama insists that the canal remains neutral. Ricaurte Vásquez, the canal’s current administrator, stated, “All nations are treated equally under the neutrality treaty.”

Nonetheless, Trump’s concerns reflect broader anxieties about China’s expanding global influence. Figures like Secretary of State Marco Rubio have raised alarms over scenarios in which Chinese control of key infrastructure could pose security risks. “At a time of conflict,” Rubio said, “if the Chinese tell [port operators], ‘shut it down and don’t let the U.S. go through,’ we’ve got a big, big problem.”

For Panama, Trump’s rhetoric is more than a diplomatic affront—it is a potential threat to national sovereignty. Memories of the 1989 U.S. invasion to oust dictator Manuel Noriega remain vivid for many Panamanians. “All he [Trump] needs is to land ten thousand troops and that’s it,” said Ovidio Diaz-Espino, author of How Wall Street Created a Nation: J.P. Morgan, Teddy Roosevelt, and the Panama Canal. “We don’t have an army.”

Panamanians also worry about the economic fallout of such threats. Luis Barrera, a cab driver in Panama City, compared Trump’s rhetoric to “taking a candy from a little kid,” highlighting the deep unease felt by ordinary citizens. Real estate professional Omayra Avendaño expressed similar concerns, stating, “We should be worried. We don’t have an army, and he’s said he would use force.”

As President Mulino noted, “Dialogue remains the ideal approach to address these issues without compromising our rights, full sovereignty, or ownership of our Canal.” The world will be watching closely as this high-stakes narrative continues to unfold.

ACZ Editor: Despite Mulino’s statement, the Panama Canal was a gift from a stupid President, the worst of his generation. Now that gift has become a threat, and it needs to be dealth with. Since Trump always starts with a negotiating position that is intolerable, it is likely that at the very least, the Chinese will be kicked out.