U.S. President-elect Donald Trump, in his campaign, promised the American voters to withdraw the country from power struggles across the globe, protect the American industries by imposing high tariffs and bring back the manufacturing industries. However, his recent comments can be seen as a shift from the non-aggressive foreign policy that he had preached. Trump set social media on fire with his remarks, such as “joking” about Canada being the latest state to be added to the U.S., his threat to take back the Panama Canal and his renewed interest in acquiring Greenland, which is a Danish territory that has time and again made it clear it wants none of it.
Despite such scenarios being highly unlikely, these provocative statements also show a possibility of Trump’s “America First” concept applying to projecting American power across the world to secure the U.S. trade and security agendas. In a post shared on his social media platform on Dec. 22, Donald Trump accused Panama of imposing exorbitant fees for access to the Panama Canal. He warned that unless the fee policy is revised to accommodate the U.S. demands, he would push for the canal’s management to be restored to U.S. control.
‘United States Canal’
For various reasons, the canal, a critical trade artery connecting the Pacific and Atlantic Oceans, is highly strategic to the U.S. economy. Any disruption to its operations – unprecedented since Panama assumed control in the 1970s – is expected to trigger significant price hikes on goods imported from China and other Asian nations, drastically affecting supply chains across the entire U.S. coastline. “The fees being charged by Panama are ridiculous. If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, and without question,” Trump wrote on Truth. In yet another inflammatory move, Donald Trump posted an image on his Truth Social platform depicting a U.S. flag flying over a narrow canal, accompanied by the caption: “Welcome to the U.S. Canal.!” The post further strained relations with Panamanian President Ricardo Martinelli Mulino, who responded forcefully through a video message on his X account, affirming, “Every square foot of the Panama Canal and the land surrounding it will forever belong to Panama.”
This sharp exchange underscores the growing diplomatic rift sparked by Trump’s rhetoric. His threats to reassert U.S. control over the Panama Canal have sent shockwaves through the global political landscape, intensifying bilateral tensions while signaling deeper geopolitical challenges. The provocative statements – in addition to the Canada and Greenland controversies – have not only negatively affected the U.S.-Panamanian relationship but will also have far-reaching implications for global stability, raising questions about the potential disruptions to the international order and the enduring influence of U.S. foreign policy after Trump’s second entry into the Oval Office.
The Panama Canal, a 51-mile engineering marvel connecting the Atlantic and Pacific Oceans, has been a symbol of American prowess since its completion in 1914. Initially controlled by the U.S., the canal was later handed over to Panama by the end of 1999 following the Torrijos-Carter Treaties. Trump’s recent comments have revisited this history, challenging Panama’s sovereignty and echoing sentiments of American imperialism in the region.
Trump’s claim of “ridiculous” fees and the possibility of Chinese interference in the canal are indicative of high-voltage foreign policy under the Trump 2.0. Trump’s threat to take back the Panama Canal has the potential of having consequences that will affect not only the Americas but also other parts of the world in terms of trade and politics.
Threatening friends and foes
If Trump attempts to realize his plan, then it will create a strong precedent for how other important waterways should be handled. Trump’s rhetoric is an indication of the possible shift in the U.S. foreign policy to a more assertive and unilateral one. By threatening Panama’s sovereignty and stoking concerns over Chinese expansion in the area, he demonstrates a willingness to go to force to advance the U.S. strategic position. However, such a strategy may have the potential of isolating allies and straining relations with other countries, as well as challenging the norms of sovereignty and territorial integrity that are the cornerstone of the existing world order.
This episode also shows the increasing rivalry between the U.S. and China for influence networks. Interestingly, China does not have direct ownership of the Panama Canal; a company from Hong Kong manages two of the canal’s ports. However, this is not the first time that Trump has expressed concerns over Beijing’s increasing power in its vicinity. Trump’s statements are in line with the overall discourse on China’s Belt and Road Initiative and its attempts to ensure dominance in the sea lanes.
There are high chances of increased U.S.-China tension over the Panama Canal in the coming days – with a potential impact on the global economy. Countries that currently depend on the canal for their trade relations with other parts of the world, especially those in Europe and Asia, may become mere victims of this geopolitical war. The EU, for instance, has a lot to lose in terms of trade relations, and any disturbance that may occur at the Panama Canal may significantly affect European economies.
Just a populist demagogue?
A more plausible theory, however, is that Trump is just playing the role of a firebrand populist – similar to how he rages and brags against Mexico, China or Canada, for instance – is another way of playing to the domestic audience. Populist demagogues, by the nature of their office and by choice, create the conditions of external threat, whether real or perceived and wrap themselves in the flag as saviors of the nation. From this point of view, Trump’s latest outburst is consistent with his past demeanor. Trump’s statement on the Panama Canal has brought back memories of the controversy surrounding the canal and the questions that it raises regarding the ownership of such a critical asset for world trade.
Instead of fabricating conflicts with other nations or targeting immigrants – such as his baseless claim that Haitians are eating cats and dogs in Ohio – Donald Trump should turn his attention to the pressing crises facing the U.S. The nation is grappling with a broken healthcare system, an epidemic of mass shootings, escalating climate disasters decimating entire regions and record levels of income inequality. These issues are far more consequential to Americans than canal fees or outlandish remarks about foreign adversaries. So why isn’t Trump addressing them? Perhaps he’s trying to divert attention from these urgent challenges, or maybe he’s playing to the xenophobic tendencies of his base to maintain political momentum. Either way, this approach does nothing to solve America’s real problems and only deepens divisions. It’s a disappointing – and dangerous – display of misplaced priorities.