(Bloomberg) — Panama’s president rebuffed Donald Trump’s threat to reimpose US control over the Panama Canal, saying its shipping tolls aren’t inflated and that sovereignty over the waterway isn’t negotiable.
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“Every square meter of the Panama Canal and its adjacent zones is part of Panama, and it will continue to be,” President José Raúl Mulino said Sunday in a video statement on X, the social platform.
Mulino’s defense of Panamanian control over the key commercial waterway shows how Trump is already exerting global influence after he brought control over the canal into play over the weekend, decrying “ridiculous” transit fees for US vessels and alleged Chinese encroachment.
Trump’s diplomatic hardball — just less than a month before his inauguration — represents a new front in his attempt to ratchet up pressure on trading partners. After Mulino’s retort about continued Panamanian control, Trump said, “We’ll see about that!” on his Truth Social platform.
China doesn’t control the canal, though a Chinese company — a subsidiary of Hong Kong-based CK Hutchison Holdings Ltd. — has two of the five ports adjacent to the canal, one on each side.
Under Panama’s constitution, the canal is managed by the Panama Canal Authority, with some of the tolls going into the national treasury. The authority said last week that it had deposited almost $2.5 billion in the last fiscal year.
And China’s influence has been growing in the region. In 2017, Panama severed diplomatic ties with Taiwan and declared that there was “only one China.”
After raising the issue on his social platform, Trump claimed Sunday that the canal was “falling into the wrong hands.”
“It’s not for China or any other country to manage,” he told a conservative audience in Phoenix. “You see what’s going on there? China.”
In a post on his Facebook account later Sunday, Trump posted an image of a US-flagged vessel on a body of water with the caption “Welcome to the United States Canal!”
Chinese Foreign Ministry spokesperson Mao Ning said later that “the canal is not directly or indirectly controlled by any major power.”
“China will, as always, respect Panama’s sovereignty over the canal and recognize it as a permanently neutral international waterway,” she said at a regular press briefing in Beijing on Monday, according to a video clip posted online by state broadcaster China Central Television.
