Trump threatens to try to take back Panama Canal

Donald Trump has suggested his new administration could try to regain control of the Panama Canal that the US “foolishly” ceded to its Central American ally, contending that shippers are charged “ridiculous” fees to pass through the vital transportation channel linking the Atlantic and Pacific Oceans.

Panama’s conservative president Jose Raul Mulino, who was elected in April on a pro-business platform, roundly rejected that notion as an affront to his country’s sovereignty.

The Republican president-elect used his first major rally since winning the White House on November 5 to bask in his return to power as a large audience of conservatives cheered along.

It was a display of party unity at odds with a just-concluded budget fight on Capitol Hill where some Republican legislators openly defied their leader’s demands.

Addressing supporters at Turning Point USA’s AmericaFest in Arizona, Mr Trump pledged that his “dream team cabinet” would deliver a booming economy, seal US borders and quickly settle wars in Israel and Ukraine.

“I can proudly proclaim that the Golden Age of America is upon us,” Mr Trump said.

“There’s a spirit that we have now that we didn’t have just a short while ago.”

His appearance capped a four-day pep rally that drew more than 20,000 activists and projected an image of Republican cohesion despite the past week’s turbulence in Washington with Mr Trump pulling strings from his Mar-a-Lago resort in Florida as Congress worked to avoid a government shutdown heading into the Christmas holiday.

House Republicans spiked a bipartisan deal after Mr Trump and Elon Musk, his billionaire ally, expressed their opposition on social media.

Budget hawks flouted Mr Trump’s request to raise the nation’s debt ceiling, which would have spared some new rounds of the same fight after he takes office on January 20 2025, with Republicans holding narrow control of the House and Senate.

The final agreement did not address the issue and there was no shutdown.

Mr Trump, in his remarks in Phoenix, did not mention the congressional drama, though he did reference Mr Musk’s growing power.

To suggestions that “President Trump has ceded the presidency to Elon”, Mr Trump made clear: “No, no. That’s not happening.”

“He’s not gonna be president,” Mr Trump said.

Mr Trump opened the speech by saying that “we want to try to bring everybody together. We’re going to try. We’re going to really give it a shot”.

Then he suggested Democrats have “lost their confidence” and are “befuddled” after the election but eventually will “come over to our side because we want to have them”.

Atop a list of grievances – some old, some new – was the Panama Canal.

“We’re being ripped off at the Panama Canal,” he said, bemoaning that his country “foolishly gave it away”.

The United States built the Panama 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 December 31 1999 under a treaty signed in 1977 under 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 all shippers are charged for reserving a slot.

With weather returning to normal in the later months of this year, transit on the canal has normalised.

But price increases are still expected for next year.

Mr Mulino has been described as a conservative populist who aligns with Mr 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.

Still, Mr Trump said that once his second term is under way: “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,” the president-elect said.

“So to the officials of Panama, please be guided accordingly.”

Mr Trump did not explain how that would be possible.

A short time after Mr Trump’s speech, Mr Mulino released a video declaring that “every square metre of the canal belongs to Panama and will continue to belong” to his country.

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

“The tariffs are not set on a whim,” Mr 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,” Mr Mulino said.

“But when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag.”

The canal aside, Mr Trump’s appearance at Turning Point’s annual gathering affirmed the growing influence the group and its founder, Charlie Kirk, have had in the conservative movement.

Mr Kirk’s organisation hired thousands of field organisers across presidential battlegrounds, helping Mr Trump make key gains among infrequent voters and other groups of people that have trended more Democratic in recent decades, including younger voters, black men and Latino men.

“You had Turning Point’s grassroots armies,” Mr Trump said.

“It’s not my victory, it’s your victory.”

Earlier on Sunday, Mr Trump said that Stephen Miran, who worked at the Treasury Department in Mr Trump’s first term, was his choice to lead the Council of Economic Advisers.

And Australian billionaire Anthony Pratt announced he was donating 1.1 million dollars to Mr Trump’s inaugural fund to complement the 14 million dollars that he said he had already given to the Make America Great Again Inc super political action committee – making him one of the president-elect’s top donors.

Mr Pratt is chairman of Pratt Industries, which uses recycled paper and boxes as a raw material in a process that produces new cardboard.