Panama’s President, José Raúl Mulino, ruled out any negotiations with the United States regarding its interoceanic canal and tariffs for vessels from that country, following threats by President-elect Donald Trump to reclaim the maritime route. “There is no possibility, under this president, to discuss anything that seeks to reconsider the legal-political reality of the Panama Canal being in Panamanian hands. If the intention is to talk along those lines, then there is nothing to discuss,” Mulino said at a press conference.
“The canal belongs to Panama and Panamanians, and there is no possibility of opening any kind of conversation about this reality, which has cost the country tears, sweat, and blood,” he added. The Panama Canal, built by the United States and inaugurated in 1914, was transferred to Panamanian control on December 31, 1999, under treaties signed in 1977 by then-U.S. President Jimmy Carter and Panamanian nationalist leader Omar Torrijos.
Trump threatened on Saturday to take back control of the canal if toll prices for U.S. ships are not reduced, despite the fact that the tariffs paid by vessels are not determined by their country of origin. “The rates charged by Panama are ridiculous (…) this complete scam against our country will end immediately,” Trump said.
U.S. Paid A Pittance
However, Mulino ruled out lowering toll prices for U.S. ships. “Tolls in the canal are not set at the whim of the president or the administrator [of the interoceanic route]. There is an established process for setting canal tolls that has been respected from day one until now, it is a public and open process,” said the president.
The 80-kilometer-long canal connects the Pacific Ocean with the Atlantic. The United States, with 74% of the cargo, and China, with 21%, are its main users, followed by Japan, South Korea, and Chile. The tariffs paid by vessels to use the route are set by the Panama Canal Authority, an autonomous Panamanian public entity, based on the needs of the canal and international trade demand.
The toll system “is differentiated by market segment, regardless of the vessel’s origin, destination, or registration,” explained former canal chief Jorge Quijano. “Any toll increase for ship transit must be analyzed based on our competitiveness as a country,” he added.
The canal contributes 6% to Panama’s GDP. In the last fiscal year, more than 11,200 ships crossed it, carrying 423 million tons of cargo, contributing $2.47 billion to the treasury. Since 2000, the canal has delivered more than $28 billion to the Panamanian treasury, far exceeding the $1.878 billion during the 85 years of U.S. administration.
“It was a pittance of what we were paid as a country until 1999,” Mulino emphasized. Quijano noted that Americans “benefited greatly from the canal, but now, under almost 25 years of Panamanian administration, the canal’s goal is to ensure its benefits are for Panamanians.”
No Chinese Soldiers
The canal, through which 5% of global maritime trade passes, connects more than 1,900 ports in 170 countries. Last year, 52% of ships had U.S. ports as their origin or destination. The Panamanian president also rejected Trump’s accusations of alleged Chinese interference in the trade route. Trump even claimed that Chinese soldiers were illegally operating the canal.
“There is absolutely no Chinese interference or participation in anything related to the Panama Canal (…), there are no Chinese soldiers in the canal, for God’s sake,” Mulino stated. “There may be geopolitical fears that could have some validity from their perspective, but as far as Panama is concerned, there is absolutely no truth to it,” he added.
Panama established diplomatic relations with China in 2017, after breaking ties with Taiwan, a decision criticized by Trump’s first administration
