President-elect Donald Trump has warned of reasserting U.S. control over the Panama Canal, claiming that Panama is imposing unfair charges for its use.

During an event in Arizona on Sunday, Trump expressed that he would not permit the canal to fall into “wrong hands,” hinting at a possible Chinese influence in Panama, as reported by Reuters.

“Has anyone ever heard of the Panama Canal?” Trump questioned at AmericaFest, a conservative event by Turning Point. “Because we are being taken advantage of at the Panama Canal just like everywhere else.”

Panamanian President Jose Raul Mulino condemned Trump’s remarks, asserting that Panama will maintain its independence and that China does not exert influence over the country. He mentioned that the pricing for passage is determined based on market conditions.

What is the Panama Canal?

The Panama Canal is a crucial 51-mile-long passage linking the Atlantic and Pacific oceans, situated in the heart of Panama between Central and South America. The canal serves as the largest customer for the U.S., according to the Guardian.

By using the canal, commercial shippers and naval forces avoid the long journey around the southern tip of South America. It allows ships traveling between the U.S. east and west coasts to save roughly 8,000 nautical miles.

Construction of the canal commenced by the U.S. in 1903, after a failed attempt by France, and it was completed in 1914. The canal underwent an expansion in 2016.

The canal features a system of locks that enable vessels to traverse across Panama. It operates around the clock throughout the year, accommodating nearly 14,000 ships annually, including commercial and U.S. Navy vessels.

Alongside the Suez Canal, the Panama Canal is regarded as one of the two most significant waterways globally.

When did Panama gain control of the canal?

The canal was built and managed by the U.S. until a treaty signed by President Jimmy Carter in 1977 transferred control to Panama in 1999.

The Panama Canal Authority, an 11-member board, oversees the canal’s operation and security on behalf of the Panamanian government.

Can Trump regain control of the Panama Canal?

It remains uncertain how Trump plans to regain U.S. control of the canal, as he did not specify any method for this. He criticized Panama for what he termed “outrageous” fees charged to the U.S. government, Navy, and businesses for passage.

Mulino asserted that the rates are discussed transparently in public forums and take into account market conditions, international competition, operational expenses, and the canal’s upkeep and modernization needs, as reported by the Hill.

Which countries utilize the canal the most?

The United States is the predominant user of the Panama Canal, accounting for approximately 75% of its traffic in the fiscal year 2024, a rise from 66% in 2019, according to pancanal.com and research by the Center for Strategic & International Studies.

China and Japan follow as the second and third largest users of the canal, respectively.