Donald Trump, in his inaugural speech on Monday, made several major announcements, including his long-term pledge to reclaim control of the Panama Canal.

“We gave it to Panama and we’re taking it back,” he said.

In his speech during his inauguration last night, Trump criticised the 1977 treaty that transferred control of the Panama Canal to Panama, describing it as a “foolish gift that should never have been made.”

He condemned the move by the previous U.S. administration, emphasising that the canal, built by the U.S. in the early 1900s at the cost of millions of dollars and 38,000 lives, should not have been handed over.

In his first address as the 47th U.S. President, Trump alleged that U.S. ships, including Navy vessels, were being unfairly overcharged at the Panama Canal. He claimed that China had taken control of the waterway and accused Panama of “breaking its promise to the U.S.”

Outlining a strikingly contrasting vision to Biden's foreign policy, Trump declared himself a “peacemaker and unifier” while reiterating his vow to “take back” the Panama Canal.

Additionally, Trump has not ruled out the possibility of military intervention.

Response from Panama President

The remarks prompted a strong rebuttal from Panamanian President José Raúl Mulino, who asserted that the canal “is and will remain Panama’s.”

He emphasised that the canal’s administration ensures its permanent neutrality. Mulino further stated, “It was the result of generational struggles, culminating in the 1999 Torrijos-Carter treaty. For 25 years, we’ve managed it responsibly to serve global trade, including the U.S.”

Why the Panama Canal is crucial for the U.S.

The Panama Canal, a 51-mile man-made waterway connecting the Atlantic and Pacific Oceans, has played a pivotal role in global trade. It significantly shortened the travel time for ships. The Panama Canal remains a vital artery for global trade, as reportedly around 5% of worldwide cargo passing through its locks each year. The canal primarily serves as a crucial trade route for goods moving between the U.S. East Coast and Asia. Major commodities transported through the canal include metals, oil, grains, and chemicals.

The canal operated under U.S. control for much of the 20th century, with the U.S. overseeing its governance and operations. However, this system fuelled resentment among Panamanians, who lacked equal rights. Tensions peaked in 1964, leading to violent clashes.

The U.S. and Panama eventually reached an agreement through the Torrijos-Carter Treaties in 1977, which outlined the gradual transfer of control over the canal back to Panama. Finally, full control was transferred to Panama in 1999.

Despite its transfer to Panama in 1999, the U.S. remains the largest user of the canal, with about 40% of all U.S. container traffic passing through it annually.

Reportedly, every year cargo valued at $270 billion transits the canal.

The canal also offers a faster route for ocean cargo compared to the Suez Canal. For instance, traveling from Shenzhen, China, to Miami, Florida, takes 35 days via the Panama Canal, 6 days shorter than the 41 days from the Suez Canal.

In December, Trump took to his social media platform Truth Social and criticised Panama for "exorbitant" fees for canal use.

What else is in works?

Trump plans to reshape U.S. foreign policy with an expansionist focus, including renaming the Gulf of Mexico to the Gulf of America.

“We’re going to change the name of Gulf of Mexico to Gulf of America,” said Trump.

Trump has also pledged to send astronauts to Mars. He also vowed to restore the name of North America's highest peak to Mount McKinley, reversing the 2015 change made under the Obama administration to honour Alaska Native traditions.

“We will restore the name of the great President William McKinley to Mount McKinley, where it should be and where it belongs. President McKinley made our country very rich through tariffs and through talent,” Trump said.

Torrijos-Carter treaty

Trump vows to reclaim Panama Canal, criticises 1977 transfer; gets an earful from Panama's President