Context: US President Donald Trump accused Panama of unfairly charging the US for using the Panama Canal.

• In a post on Truth Social, he threatened a potential US takeover of the canal if Panama did not comply, labeling the situation a “rip-off.”

• Trump also criticized former President Jimmy Carter for “giving away” the canal in 1977 and expressed concerns about China’s involvement in Panama’s infrastructure, linking it to the Belt and Road Initiative.

About Panama Canal

• It is a constructed waterway that connects the Atlantic and Pacific oceans across the Isthmus of Panama.

• It is one of the two most strategic artificial waterways in the world, the other being the Suez Canal.

• It is approximately 80 kilometers long.

• The canal was built by the United States between 1904 and 1914, and it was officially opened on August 15, 1914.

• It is owned and administered by the Republic of Panama since the oversight of the Canal was transferred from the United States to Panama in 1999.

• The Panama Canal consists of a series of locks that raise and lower the water level to facilitate the passage of ships through the continental divide.

Significance of the Panama Canal

• The Panama Canal, completed in 1914 after a decade of US-led construction, is a vital artificial waterway connecting the Atlantic and Pacific Oceans.

• It significantly reduces shipping costs and travel time by bypassing the southern tip of South America.

• Handling about 6% of global trade annually, the canal remains crucial for international commerce, particularly for US shipping and defense.

US Role in Canal Construction

• The US was instrumental in constructing the canal after France abandoned earlier efforts.

• President Theodore Roosevelt prioritized the project, navigating engineering challenges with innovative “lock” systems to facilitate ship passage.

• However, construction came at a high cost, including over $300 million and thousands of workers’ lives.

• The canal’s creation involved controversial treaties with Panama, following its US-backed independence from Colombia in 1903.

Transfer of the Canal to Panama

• Tensions over US control of the canal led to the Torrijos-Carter Treaties of 1977.

• These agreements established Panamanian sovereignty over the canal by 1999 while preserving its neutrality under US defense oversight.

• The decision to relinquish control stemmed from rising operational costs, inefficiencies, and diminishing strategic value for the US.