Panama Canal Crisis: Trump's Threats and Climate Change Create Perfect Storm

As Panama celebrates the 25th anniversary of regaining control of the Panama Canal, the historic milestone is marked by both triumph and challenges. The December 31, 2024 commemoration coincided with the passing of former U.S. President Jimmy Carter, who was instrumental in negotiating the 1977 treaties that led to the canal's transfer.

The celebration has been overshadowed by President-elect Donald Trump's controversial statements threatening to reclaim control of the canal. Trump criticized Panama's toll structure and made unsubstantiated claims about Chinese influence in canal operations. In response, Panamanian President José Raúl Mulino firmly declared that "every square meter of the canal" would remain under Panamanian control.

The canal's most pressing challenge, however, comes from environmental factors. Severe drought conditions have forced significant operational restrictions, reducing daily ship passages from 38 to 24, with further reductions planned for 2024. The drought, linked to El Niño patterns, has led to unprecedented low water levels in Lake Gatun, the canal's primary water source.

Since the 1999 handover, Panama has demonstrated effective management of the canal, completing a major expansion project in 2016 at a cost of $5.2 billion. The canal contributes significantly to Panama's economy, generating approximately 6% of the country's GDP.

The current situation highlights the complex interplay between national sovereignty, climate challenges, and international trade dynamics. As Panama moves forward, it faces the dual challenge of maintaining its sovereign rights while adapting to environmental changes that threaten the canal's operational capacity.