Trump threatens to take back Panama Canal as he complains about 'ridiculous fees'

US President-elect Donald Trump turned several heads after he threatened to take back the Panama Canal if Panama does not manage the waterways in an acceptable manner. Trump made the provocative remarks after he accused the Central American nation of charging excessive rates for using the passage.

“The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the US,” Trump wrote on his Truth Social late Saturday. The comments came a little more than a month before he took over the Oval Office once again. “This complete ‘rip-off’ of our Country will immediately stop….” he furthered.

In the same post, the American President-elect warned that he would not let the canal fall into the “wrong hands”. He also raised alarms over potential Chinese influence over the passage, insisting that the canal should not be managed by Beijing. Trump emphasised that Panama was a “vital national asset’ for the United States, calling it “crucial” for the country’s commerce and national security.

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Interestingly, Trump’s remarks on the Panama Canal came days after he suggested that Canada should become the 51 state of the United States, referring to Prime Minister Justin Trudeau as “Governor Trudeau”. Trump’s recent comments underscore his foreign policy as he assumes office for the second time.

On Friday, The Financial Times reported that the president-elect’s team told the European officials that he would demand Nato member states to increase defence spending to 5 per cent of their GDP. It has been 25 years since Washington handed over the control of the Panama Canal to Panama following a period of joint administration over the passageway.

In 1977, then-American President Jimmy Carter negotiated the Torrijos-Carter Treaties that gave Panama control of the canal and the Neutrality Treaty, which allowed the US to defend the canal’s neutrality. The canal is currently administered by the Panama Canal Authority.

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The US which completed the canal in 1914, continues to remain the passageway’s biggest customer and is responsible for about three-quarters of the cargo transiting through each year. Meanwhile, China is the second biggest customer of the canal. It is pertinent to note that a Chinese company based in Hong Kong controls two of the five ports adjacent to the canal, one on each side.

However, the Panama Canal is currently experiencing a 29 per cent decrease in ship transits over the past fiscal year due to severe drought conditions, claimed the canal authority. The prolonged droughts have hampered the canal’s ability to move ships between the Atlantic and Pacific oceans.

Trump noted that China is not managing the canal, raising worries that its control can fall into the wrong hands. “It was not given for the benefit of others, but merely as a token of cooperation with us and Panama,” the president-elect averred. “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 us, in full, and without question. To the Officials of Panama, please be guided accordingly!” he added.

Meanwhile, an official from the Panama government told Bloomberg that the Central American nation is aware of Trump’s remarks and there will be a formal response in the coming days.

With inputs from Reuters.