Donald Trump threatens to take over Panama Canal over ‘ridiculous fees’

Trump said that the ships passing through the vital waterway are charged “ridiculous” fees to do so.

“We’re being ripped off at the Panama Canal,” he said in a rally in Arizona, the Associated Press reported. Trump bemoaned that his country ”foolishly gave it away.”

He said that if the principles, both moral and legal, of this “magnanimous gesture of giving are not followed, then 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,” he added.

The United States built the canal in the early 1900s as it looked for ways to facilitate the transit of commercial and military vessels between its coasts. Washington relinquished control of the waterway to Panama on Dec. 31, 1999, under a treaty signed in 1977 by President Jimmy Carter.

The canal depends on reservoirs to operate its locks and was heavily affected by 2023 Central American droughts that forced it to substantially reduce the number of daily slots for crossing ships. With fewer ships using the canal each day, administrators also increased the fees that are charged to all shippers for reserving a slot.

With weather returning to normal in the later months of this year, transit on the canal has normalized. But price increases are still expected for next year.

Reaction from Panama

Shortly after Donald Trump‘s speech at the AmericaFest in Arizona, Panama’s President Jose Raul Mulino reacted to it by releasing a video declaring that “every square meter of the canal belongs to Panama and will continue to belong” to his country.

Without mentioning Trump by name, Mulino addressed Trump’s complaints over rising fees for ships crossing the canal, saying they are set by experts who take into account operational costs, and supply and demand factors.

“The tariffs are not set on a whim” Mulino said. He noted that Panama has expanded the canal over the years to increase ship traffic “on its own initiative,” and added that shipping fee increases help pay for improvements.

“Panamanians may have different views on many issues. But when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag,” Mulino said.

Mulino has been described as a conservative populist who aligns with Trump on many issues. Panama is a strong US ally and the canal is crucial for its economy, generating about one-fifth of that government’s annual revenue.