Trump’s Threats Against Panama are Simultaneously Humorous and Serious

Donald Trump drives leftists crazy, and I can’t help but chuckle every time he comes up with something out of left field that gives them a collective aneurysm.

The Panama Canal

You can read about the history of the Panama Canal, but in essence, it is a long series of locks that connect the Pacific Ocean to the Atlantic Ocean, and it runs directly through a narrow sliver of real estate in Panama.

The U.S., under President Theodore Roosevelt, purchased the land in the canal zone from France for $40 million in 1902. On November 18, 1903, the Hay-Bunau-Varilla Treaty was signed with the newly elected government of Panama, giving America exclusive and permanent possession of the Panama Canal Zone. The canal was completed in 1914 at a cost of $375 million, which, if adjusted for inflation, would be $11.5 billion in 2024 dollars. Conservatives estimates of the number of people who died working on the project range from 20,000 to 56,000.

Once the canal was finished, maritime transportation costs plummeted and supply chains thrived. Everything was operating smoothly until President Jimmy Carter, you know, the guy receiving all the accolades in the leftist history rewrite, gave it away for one dollar in 1977.

One dollar…

Out of all of Carter’s horrible decisions, this was probably the worst because it’s one of those leftist gifts that keep on giving decades after the misguided act. Since handing the keys to Panama’s government in 1999, control of the key ports of Balboa and Cristobal on either side of the canal have fallen into the hands of the Chinese government through its business surrogate, Hutchison Whampoa.

The urgency of the canal issue centers around a 50-year contract for a new water management system. The new system will be designed to address the lower water levels in the canal brought on by drought and overuse. Currently, the U.S. Corp of Engineers is in the design phase, but there will be robust efforts by firms from many countries, including China, to secure the actual construction contract.

If Hutchison Whampoa becomes the prime contractor, it would give the Chinese government enormous power to affect transshipment cargo operations in the canal. Beijing could manipulate and force their surrogate to disrupt canal operations. In the event of a confrontation with the U.S., China could control who is allowed to pass through this critical international waterway where massive amounts of cargo traffic are bottlenecked. As it stands, in 2021, Panama approved an extension of Hutchinson’s existing contract to operate the key ports for another 40 years.

Trump Steps in

Upon initially hearing Trump’s claim that the U.S. might have to take back the Panama Canal, many took it as just another Trumpism, something to chuckle about and then move on. I mean, the thought of taking back a critical asset a former President of the United States officially gave away almost 50 years ago is deliciously absurd.

But now it appears Trump wasn’t joking at all.

The contentious issue relates to the treaty that turned the canal over to Panama’s government. In the text of the first treaty, there is a clause that compels Panama to operate the canal neutrally and provide fair pricing for all. In the event the neutrality is compromised, the U.S. has a right to defend the canal from whoever is presenting the threat.

Since Hutchison Whampoa, a Hong Kong company, is now under the direct control of the Chinese government, it seems Trump is interpreting this as the type of threat that allows the U.S. to intervene and assume control of the canal, especially if there is evidence that America is being charged higher rates than other countries.

As strange as it sounds, he very well may have a sound basis for intervention.

Trump will not Rule out Using Force

In a recent news conference, the President-elect explicitly said he would not rule out the use of force in Panama.

“I’m not going to commit to that. It might be that you’ll have to do something. The Panama Canal is vital to our country.”

It’s time to recognize that when it comes to Greenland and the Panama Canal, we have moved out of the joking phase. These are clearly issues Trump intends to pursue vigorously, and the pronouncements and subtle threats also serve as notice to the world that the days of the U.S. getting kicked around on the global stage are over.

Don’t be surprised if during the first few days of Trump’s presidency, an aircraft carrier doesn’t make its way to the Gulf of Panama. Faced with the choice of invasion or compromise, if I was Panamanian President Mulino, I would be hard at work drawing up a new agreement that kicked the Chinese out of the canal and significantly lowered rates for American-related transit.

Get your popcorn ready. The first 100 days of the new Trump administration are going to be very entertaining and extraordinarily consequential.