Donald Trump and Panama are battling it out over control of the canal

Donald Trump and Panama are battling it out over control of the canal

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Panamanian President José Raúl Mulino hit back at Donald Trump after the president-elect said he would demand the “return” of the Panama Canal to the United States if the vital waterway was not operated as he wished.

Trump’s weekend salvo and the diplomatic feud that followed offered a taste of his chaotic brand of international politics, less than a month before his return to the White House. The president-elect attacked the Central American country over what he said were excessive fees for sea freight to use the canal, which is vital to the U.S. economy.

“I want to make it clear that every square meter of the Panama Canal and its adjacent area belongs and will continue to be part of PANAMA. “The sovereignty and independence of our country are non-negotiable,” Mulino said in a statement on Sunday.

Trump said in a social media post on Saturday that “we will demand the return of the Panama Canal to us” if the “moral and legal principles of (the US’s) magnanimous gesture of giving are not followed,” adding that control The canal was “stupidly” ceded to Panama 25 years ago.

“We are being ripped off at the Panama Canal like we are being ripped off everywhere else,” Trump told his supporters at a conservative conference in Phoenix on Sunday. “The fees charged by Panama are ridiculous and highly unfair.”

The United States, which completed the canal 110 years ago, handed full control to Panama in 1999 during Bill Clinton’s presidency after then-President Jimmy Carter negotiated a treaty in 1977. “We built it. We are the ones who use it. They gave it away,” Trump said of the Carter administration.

The Panama Canal is dominated by US traffic. According to the Panama Canal Authority, nearly 75 percent of cargo goes to or from the United States. The waterway connects the Atlantic with the Pacific Ocean and allows ships to avoid a long journey around South America.

About $270 billion in global cargo passes through the canal each year, although the authority is struggling to persuade some shippers to return to the route after a drought reduced the number of ships that could use the waterway.

Lael Brainard, director of Joe Biden’s National Economic Council, said in a speech at the Brookings Institution on Thursday that reduced water levels in the canal have contributed to supply chain tensions in recent years.

Mulino, a center-right former security minister, became president in May after campaigning to boost foreign investment and stagnating economic growth.

Mulino said the tariffs for the canal were not set “on a whim” but based on market conditions and international competition, as well as operation, maintenance and modernization costs. He added that the trade route brought billions of dollars to the Panamanian economy.

In 2017, Panama broke diplomatic relations with Taiwan and established relations with China. Chinese investment in infrastructure and trade zones has made Beijing a key economic partner for Panama, with a Hong Kong-based company operating two of the ports at either end of the canal.

Negotiations for a trade agreement between Panama and China began in 2018 but stalled. However, Julio Moltó, Panama’s trade and industry minister, recently said talks could resume in 2025.

Trump wrote on Saturday that the channel could not be managed by China and claimed on Sunday that the channel was “falling into the wrong hands.”

Mulino said: “The canal has no direct or indirect control, neither by China, nor by the European Community, nor by the United States or any other power.”

During the campaign, Mulino emphasized ties with the United States, offered cooperation on migration and promised to “close” the Darién Gap, a stretch of jungle between Panama and Colombia that a record number of migrants have passed through on their way to the United States.

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