Orlando Pérez: ‘Retaking the Canal is not Feasible and even Trump’s Advisors Know it’

Trump won’t let go of the Canal. Orlando Pérez, a political scientist and expert on the Panama-United States relationship, tries to explain the complex situation.  Should Panama be worried about Trump and the Canal or is it just a show?  Trump has always seen the treaties as a mistake and will continue to repeat the same, but taking back the Canal is unfeasible, and even his advisors know it. Below a question and answer scenario:

How key is the Canal in the rivalry between the United States (US) and China in Latin America?

It is a strategic piece for the US, as it allows China to gain economic presence and power near its territory, consolidating its influence in the region.

Could they stop the operation of the Canal?

They could, but both sides have an interest in smooth transit. The US wants to curb Chinese influence on investments, but without affecting the operation of the Canal.

What should Panama do to maintain its relevance in global trade in the face of new maritime routes?

Operate the Canal with efficiency, transparency and neutrality, investing in its future. The greatest challenge: ensuring sufficient water in the face of climate change.

Is the Canal still a strategic security asset for the US or just a campaign issue?

Since the 1970s, the Canal has lost strategic importance for the US due to its military power on two oceans, but it remains commercially and economically key.

Could the US intervene in the management of the Canal without violating treaties?

Try, perhaps, but doing so without violating treaties would be very difficult.

Does the US want to regain control of the Canal?

Trump is seeking greater presence due to competition with China, but taking control would violate treaties and laws. It is not viable and does not suit the US, which gains more from a cooperative relationship with Panama.

If they have already sold the “supposedly” Chinese operator, what excuse does Trump have to talk about non-compliance with the Neutrality Treaty?

What remains in his crazy mind is that he will continue to use the same rhetoric. However, in practice, he no longer has any arguments and will have to acknowledge that the US has obtained important concessions from Panama, reducing Chinese influence in the region. Let them accept victory and move on to another topic.

If the Canal moves less than 1% of world trade, why does it continue to be a geopolitical headache?

Because 68% of non-maritime U.S. trade passes through the Canal, it represents 6% of global maritime trade and is key to the export of energy, liquefied natural gas and oil from the U.S. And it is essential for Chinese trade.

How would it benefit the United States to control the Canal?

It would not benefit the US. It would cost billions of dollars and would generate a huge diplomatic and political cost in the region. Today, the US uses the Canal strategically without having to invest in its operation. Taking over its control would be counterproductive.

Would raising tolls on Chinese cargo be a blow to neutrality?

Definitely. And it would affect the legitimacy and reputation of the Canal in world trade.

Has Panama violated the Neutrality Treaty or is it just political narrative?

There is no reasonable evidence for that. Panama has been scrupulous in fulfilling its rights and obligations. This narrative emerged since Trump returned to power, since no previous government, not even Trump’s first, had made such accusations.

Why does the US say that its ships should not pay tolls, if they have done so since 1914?

Because Trump is a tightwad and seeks economic advantages in everything.

Why is no one talking about the Expanded Canal and the 50% of revenue it generates?

Because in certain circles it is more convenient to focus on the historical narrative of 1904-1914 and omit that since 1999 Panama has modernized and made the Canal profitable.

What has changed since 1997 for ports to now be an issue for Trump?

The increase in strategic competition between the US and China, and the change in status of Hong Kong, which previously belonged to the United Kingdom.

Is there a real chance that the US will “take” the Canal without military intervention?

No, and military intervention is not viable either.

Only 60 US military ships cross the border each year. Isn’t that fair?

The amount they pay is insignificant compared to the US defense budget. The discussion is irrelevant in economic terms.

Should Panama respond every time Trump attacks or is it better to ignore him?

No. It is best to manage relationships strategically without playing into their hands. Responding to every lie only diverts attention.

How can Panama take advantage of this drama to improve its relationship with the US?

Fostering cooperation on security, migration and strategic investments. The key is to get the US to increase its investment in Panama and strengthen collaboration on issues of mutual interest. Mulino is doing things right if he takes into account who he is dealing with.

What should the Panamanian ambassador in Washington be doing?

What Panama should not do is politicize this issue. It should seek allies in both political ranks. Dialogue with Congress, the White House and the State Department, in addition to public visits to the media, to explain the reality of the Canal. And work in coordination with the Foreign Ministry and the ACP. One single line.

Should Mulino meet with Trump or would that be playing into his hands?

I am glad that the famous call did not happen because it would have turned out worse than the meeting with Zelensky. At some point there will be a meeting, but Mulino must be ready to handle a very volatile Trump, seeing how Macron or Sheinbaum did.

At what point should Panama put a stop to Trump’s demands? When they threaten its sovereignty or violate the Neutrality Treaty.

What else can we expect from Trump in the coming years?

More threats and noise, but the relationship with Panama should remain stable despite its atrocities. The economic chaos it creates will take its toll and force it to focus on that.

Why was Trump elected again? Was it just populism or is there something more?

Because of the inflation that was overwhelming people, the immigration crisis and the perception that Biden was not capable of continuing to govern.

If the “Chinese ghost” no longer exists in the ports, what excuse does Trump have now to talk about recovering the Canal?

That is just an excuse in the US’s strategic rhetoric. Panama has turned the Canal into a profitable business, and taking it back would violate the Neutrality Treaty, international law, and would be a diplomatic and strategic disaster for the US.  Is Panama handling the migration issue well or has it gotten out of hand?  From the US perspective, Panama has handled migration well, reinforcing security and reducing the flow through the Darien. There are no complaints, but it must debate internally the treatment of deportees from third countries. That is a delicate matter.

Panamanian policy on Trump: passivity or strategy?

Maybe passive strategy. 

Should Panama break the Neutrality Treaty to ease the pressure on the US? Or would that be diplomatic suicide? 

Panama has managed to avoid a major confrontation and reduce tensions. Trump continues to hammer home the same old story, but his rhetoric should be ignored to focus on real relations and existing cooperation. He should never break the treaty, his legal shield against US pressure and a guarantee of security against any attempt at intervention.