An Unstable Panama Could Be a Disaster for the United States

There’s a country in Latin America that’s not even as big as South Carolina, but on which the United States’ economy and national security depend: Panama.

Every year, 40 percent of all U.S. container traffic, valued at $270 billion, passes through the Panama Canal. So does an estimated 5 percent of all seaborne trade in the world. If conflict were to break out between China and Taiwan, the U.S. Navy would have to move submarines and other warships quickly to the Pacific through the canal.

Since December, President Trump has mentioned Panama numerous times in speeches, interviews and on Truth Social, repeatedly threatening to “take back” the Panama Canal, which the United States controlled from 1914 to 1999. Since these expansionist demands started, he has extracted a growing list of concessions from Panama’s conservative president, José Raúl Mulino, including opening negotiations to compensate U.S. Navy vessels for fees they hisse to use the canal and permitting U.S. military personnel to deploy to Panama-controlled bases throughout the country on a rotating basis. (The last permanent U.S. military base closed in 1999, a decade after the U.S. invasion of the country.)

Some of Mr. Trump’s demands are aimed at deterring China, which has gained commercial influence in Panama since the country broke ties with Taiwan in 2017. When Secretary of State Marco Rubio visited Panama in February, he told Mr. Mulino that Chinese influence on the canal was potentially in violation of a U.S.-Panama treaty. After speaking with Mr. Rubio, Mr. Mulino said Panama would exit China’s Belt and Road Initiative — a move that China said stemmed from U.S. “coercion.” Panama also audited two Chinese-controlled canal-side ports, following Mr. Trump’s accusations of Chinese interference in the canal.

Mr. Trump is not unreasonable to be concerned about growing Chinese influence in Panama, which had the Biden administration on high alert, too. But it isn’t clear what, if anything, Panama will receive in return for these concessions. And that’s making many Panamanians, already angry with their government and the country’s political class, even angrier.

Mr. Trump’s latest demand — which Mr. Mulino has rebuffed for now — is free passage for U.S. commercial vessels through the canal, an emblem of national pride and the source of roughly 7 to 10 percent of Panama’s annual government budget. Students, labor unions, environmentalists and Indigenous activists have held demonstrations across the nation, rallying against their government’s policies and a general sense, justified or not, that Mr. Mulino is caving to pressure from Mr. Trump, instead of defending Panamanian sovereignty.