Trump's imperialist shakedown of Panama touches a raw nerve in Latin America

Telegraph

07-03-2025

The president of Panama is a brave man. José Raúl Mulino has continued to defy the White House with open contempt even after watching the punishment beating of Ukraine.
'Donald Trump is lying again. In the name of Panama and all its people I reject this fresh assault on the truth and the dignity of our nation,' he said, in response to Trump's latest outrage, a fresh set of fabrications and threats to retake the Panama Canal.
What can this defenceless little country of 4.5m possibly do at this juncture to head off the escalating and impossible demands coming from Washington? China's presence in the canal zone has already been reduced to almost zero.
The US investment fund BlackRock is taking over the two 'Chinese' ports – one at each end of the narrow Isthmus – owned and run by Hong Kong's CK Hutchison.
It is part of a jumbo $23bn (£18bn) deal involving facilities around the world as Hutchison's Li Ka-Shing retreats from his global empire, bowing to US pressure while he can still do so for a profit. Yet Trump persists.
'My administration will be reclaiming the Panama Canal. We didn't give it to China. We gave it to Panama and we're taking it back,' he said to rapturous applause from his Maga tribe in Congress.
Those familiar with the long rhythms of Latin American history can only watch this spectacle of humiliation with foreboding. Trump is playing straight into the hands of the Chinese. The more he plays the Ugly American, the easier Beijing can exploit the Latin backlash.
The final handover of the canal in 1999, under the Torrijos-Carter Treaties, has until now been a triumph of far-sighted US diplomacy, converting Panama over time from a smouldering hot spot of anti-Gringo grievance into the most pro-American society of the Western hemisphere.
Its middle classes are educated in the US. It is designated 'free' in the Freedom House rankings with a score of 83, almost the same as the US itself. President Mulino is a tough, law-and-order, capitalist conservative.
'Picking a fight with Panama is really weird,' said Cristina Ramirez, a Panamanian political scientist at King's College London.
'The country is ideologically aligned with the US. We don't export migrants and we're already trying to counter Chinese influence. But no leader can hand over the canal because it is written into our constitution, and he wouldn't last two hours if he tried,' she said.
'What Trump has been saying is so outrageously false that Panamanians thought it must be a joke at first. Now they are scared. The US has all kinds of ways to destroy our economy.'
Trump's particular quarrel with Panama dates back to 2018, when the 65-storey Trump Ocean Club Hotel and Tower at Punta Pacifica was turned into the Marriott Hotel, and he lost an attempt to retain his brand name on the harp-shaped building.
Every claim that he now makes about the country is a distortion or invented from whole cloth. No, the canal is not controlled by China. No, 38,000 Americans did not die building it. The total deaths were 5,600 between 1904 and 1914, mostly West Indians. No, US vessels are not charged higher fees.
'Panama has operated the canal with consummate professionalism,' write Javier Corrales and James Loxton in Americas Quarterly.
'The Panama Canal Authority is run by technocrats who manage the canal better than the US did. Transit times and accident rates dropped sharply after the 1999 turnover, and Panama massively expanded the canal in 2016 at great expense. The US has enjoyed these benefits without paying for a colonial apparatus.'
What is true is that Panama pushed its luck with a temporary pro-China lurch eight years ago under an earlier president. It joined the Belt and Road, since reversed, and welcomed Xi Jinping as a conquering hero in 2018.
This broadly coincided with the death of free Hong Kong, and with China's national security law forcing private companies to act as state agents – turning Hutchison, nolens volens, into a proxy for the Chinese military.
Panama's flirtation with China was folly. The US has a treaty right to retake the canal if neutrality is ever violated. Besides, the Monroe Doctrine is a fact of geopolitical life.
The US could not allow the Chinese navy to gain a stranglehold over the main shipping route between the East and West coasts of America.
'There is a whole spectrum of risks. These Chinese ports have access to the ship manifests and can collect intelligence,' said Henry Ziemer, from the Center for Strategic and International Studies in Washington.
'They have a granular picture of all the trade going in and out, and they can even manipulate which containers go where. The ZNPF gantry cranes can submit digital data back to Beijing. And the Chinese can sabotage the canal in a crisis,' he said.
Mr Ziemer said there could be 'fatal consequences' for US operations in a Pacific war if the canal is blocked, delaying reinforcements coming from the Atlantic by several weeks. It changes the naval equation in a clash over Taiwan.
The Chinese have been poking America in the eye for several years, using the Belt and Road across Latin America as cover for military expansion. The US was asleep. Now, suddenly, the American political class is swinging to the other extreme. Panama today is not the problem.
The reason why Washington handed over the canal was because US control was becoming untenable. It took the US Army's 193rd Infantry Brigade three days and cost 26 lives to restore control after students stormed the zone in 1964, now Martyrs' Day in Panama. The White House was worried that Panamanian ultras would try to blow up the canal.
Declassified documents show that arch-realist Henry Kissinger thought the US was ceding a trick to the Soviet Union by clinging to possession. 'It looks like pure colonialism,' he said, fearing a wave of bombing attacks on US embassies.
Trump and his circle are almost certainly ignorant of what happened in Guatemala in 1954. The Dulles brothers organised a coup to overthrow the elected soft-Left government of Jacobo Arbenz at the height of Cold War paranoia. The coup destroyed faith in the possibility of democratic change and pushed a generation into clandestine armed resistance across Latin America.
One of them was a young Argentine called Che Guevara, then working as a doctor in Guatemala to help the cause. 'The struggle begins now,' he said. He joined the Cuban insurgency as aninternacionalista.
Moscow was able to exploit the febrile mood of anti-Americanism for three decades, equipping a mosaic of guerrilla uprisings through its Cuban proxies, and fomenting revolution wherever it had an opening – with success in Sandinista Nicaragua. The emotions lived on in the Bolivarian revolution of Hugo Chávez, and live still in the pro-Russian mind of Brazil's Lula da Silva.