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America’s newly elected President Donald Trump has given such a statement regarding the Panama Canal, which has created a stir at the international level. Trump threatened Panama and said that if excessive taxes on the Panama Canal are not stopped, America will once again gain control over the canal. This statement of Trump has worried many countries including Panama.
Panama’s response: No compromise on sovereignty
Panamanian President Laurentino Cortizo reacted sharply to Trump’s threat. He said, “The Panama Canal and every part of it is the property of Panama. There will be no compromise on the sovereignty and independence of our country.”
Trump’s statements and his allegations
Trump said tax rates have been increased on the Panama Canal, which is hurting American cargo shipping. He also alleged that Panama has fallen under China’s influence and the canal has fallen into the “wrong hands”. Trump said, “If Panama cannot operate this canal properly, we will have to take control of it back.”
Historical importance of Panama Canal
- Construction of the canal and American control:
The Panama Canal is an 82 kilometer long waterway connecting the Atlantic and Pacific oceans. Its construction was started by America in 1904 and it was opened to public in 1914. America had complete control of this canal from the beginning. - Steps towards sovereignty:
Following an agreement between the US and Panama in 1977, Panama was given some rights in the operation of the canal. In 1999 it came completely under the control of Panama. - Main sources of income of Panama:
The canal is the largest source of Panama’s economy, generating approximately $1 billion in revenue each year.
China’s growing influence and America’s concern
The Panama Canal plays an important role in global trade, especially for trade between the United States and China.
- China’s increasing interference:
In 2017, Panama severed ties with Taiwan and strengthened ties with China. Since then, China has invested extensively in Panama. - America’s discomfort:
Trump says that the Panama Canal should not be under the control of China. He put pressure on Panama and described it as important for American interests. Panama’s position is clear
Panama’s President rejects allegations of China’s influence, saying, “China has no control over the Panama Canal. “It is entirely the property of Panama, and we have full responsibility for its operation.”
Why is there controversy over the importance of the canal?
- Center of Global Trade:
The Panama Canal connects the American East Coast with Asia, and especially China. - Tax Dispute:
The canal’s rising tax rates are increasing US shipping costs, putting pressure on US trade. - China-US competition:
The US is concerned about China’s increasing investment in Panama, which it considers a threat to its strategic interests.
Consequences of US-Panama tension
Trump’s threat has reignited old tensions between the US and Panama.
- Disputes over the operation and revenues of the Panama Canal could affect international trade.
- This issue has become more sensitive due to geopolitical competition between China and America.
