President-elect Donald Trump recently threatened to retake control of the Panama Canal, amplifying unfounded claims that Chinese military personnel control the canal and that Panama is overcharging U.S. vessels.
Panama’s President José Raúl Mulino responded with a firm and unambiguous declaration: the canal is “100% Panamanian and it will remain so.”
In a historic and symbolic gesture, Mulino brought together former Panamanian presidents from across the political spectrum to sign a unified declaration asserting the canal’s sovereignty. The statement, endorsed by former Panamanian leaders, reverberated through a politically divided nation, offering a rare and profound moment of solidarity.
Trump’s inflammatory rhetoric has inadvertently reinforced national cohesion. No issues will unite Panamanians as strongly as this one.
Opinion
Panama’s stance echoed internationally, drawing widespread support across Latin America. Colombian President Gustavo Petro and Mexican President Claudia Sheinbaum have expressed solidarity with Mulino’s administration. The governments of Chile and Bolivia also demanded compliance with the 1977 Torrijos-Carter Treaties, which outlined the handover of the Canal to Panama at the turn of the century. Even Luis Almagro, secretary-general of the Organization of American States, weighed in, urging the U.S. to honor its agreements with Panama.
Mulino inherited a deeply troubled Panama on July 1. The country’s economy was in shambles: Public debt had skyrocketed, the pension system was nearly insolvent, and one of Central America’s largest mines was indefinitely shut down. Public discontent was at a breaking point, with corruption and a decline in trust in public institutions reaching historic highs.
Yet, Mulino’s first six months in office have been generally well received. His transparency and decisive action on urgent issues like pension reform and migration, areas his predecessors largely ignored, have been praised. His administration has launched an aggressive campaign to improve Panama’s global reputation, and his 2025-29 strategic plan projects steady economic growth of 4%-5%, a 2% inflation rate, and reduced fiscal deficits.
But just as the winds seemed to be in Mulino’s favor, the greatest challenge of his presidency appeared on the horizon: Donald Trump.
Trump’s foreign policy unpredictability could strain the historically close U.S.-Panama relationship. Moreover, Trump appointed Kevin Marino Cabrera as his pick for ambassador to Panama, a loyal ally who previously worked on Trump’s 2020 campaign. Cabrera, a Spanish speaker, pledged unwavering support for Trump’s “America First” vision and his bold approach to diplomacy.
Domestically, Panama continues to grapple with high levels of migration through the Darién Gap, with nearly 289,000 migrant arrivals recorded by November 2024. While migration levels are down 38% from the previous year, the crisis remains a pressing issue. Under a memorandum with the Biden administration, the U.S. contributed $6 million to Panama’s deportation programs, resulting in the deportation or expulsion of 1,200 individuals by November. Mulino has urged Trump to continue this support while seeking collaboration on other issues such as narcotics control, security, and semiconductor partnerships.
In the face of Trump’s isolationist and confrontational approach, Panama can pivot toward strengthening ties with other democratic nations. Mulino’s administration has signaled interest in deepening relationships with countries such as Norway, New Zealand, Australia, the U.K., South Korea, Japan and Canada— nations with strong democratic credentials and economic potential.
This shift reflects the broader global realignment between democracies and autocracies. While the U.S. has historically led the democratic bloc, Trump’s erratic leadership may leave allies searching for new anchors in the international system.
Cristina Guevara is an MS Candidate in Global Prosperity at the University College London and former legislative and policy Advisor, National Assembly of Panama.
Part of our series The Unraveling of Latin America, this essay discusses Panama’s options with a confrontational upcoming Trump administration.
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Publish date : 2025-01-04 03:30:00
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Publish date : 2025-01-04 17:08:37
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