The News
Panama pushed back after the US State Department on Wednesday said government ships would be allowed to cross the Panama Canal for free.
The Panama Canal Authority rejected the claim, adding that it was ready to establish a dialogue with the US — the Authority governs the waterway independently and sets transit tolls.
Since the US relinquished control of the waterway in 1999, Washington has paid some $25.4 million dollars to move US warships and submarines through the canal, according to official Panama figures. But very few US Navy vessels go through it — just 0.5% of annual traffic, according to canal officials. Free passage would save the Pentagon around $13 million; the Defense Department’s annual budget is $850 billion, The Wall Street Journal noted.
US President Donald Trump has repeatedly vowed to retake control of the canal — through which 40% of US container ships pass — citing China’s influence over the waterway as a national security threat.
SIGNALS
Panama officials suspect US wants to ‘back them into a corner’
Panama had been privately assessing a potential deal to allow US Navy ships to transit through the canal for free when the State Department made its Wednesday announcement, leaving officials scrambling. The US “jumped the gun,” The Wall Street Journal wrote, with Panama officials seeing it as “a way to back them into a corner.” Allowing US government vessels free passage would mark a “significant concession” to Trump: The original treaty — negotiated by former President Jimmy Carter — governing the canal stipulates that no user can receive preferential treatment. If Panama does not concede, however, there is growing concern that Trump could use force: “We’re taking it back, or something very powerful is going to happen,” Trump said before Rubio’s visit.
Questions over China’s influence remain
That the Panama Canal is a point of sensitivity for US national security has been a “core principle” in Washington for much of the last century, Americas Quarterly editor-in-chief Brian Winter wrote. And while Panama’s president has repeatedly denied any Chinese influence over the canal, some experts believe Trump’s claims aren’t necessarily baseless: The two largest ports appending either end of the canal are run by a Hong Kong-based company, and any disruption there would “cripple” the ability of the US Navy to move resources around the world, Winter wrote. Meanwhile, Panama has pulled out of China’s Belt and Road Initiative and dialed back other ties to Beijing in recent days — moves welcomed by Washington.