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FILE PHOTO: Singapore MAERSK TAURUS container ship transits through Cocoli Locks in the Panama Canal, on the outskirts of Panama City, Panama, August 12, 2024.
Trump threats prompt Panama probe
Just hours after Donald Trump threatened again to take the Panama Canal in his inaugural address Monday, Panama opened a probe into a Hong Kong-based company that operates ports at both ends of the waterway.
The backdrop: The US built and opened the canal in 1914, and kept direct control of it until 1999, when it was given to Panama after years of protest against the US presence. Trump says that was a “mistake” and wants to retake it, claiming Panama “overcharges” US ships and has allowed China to exert too much influence.
Canal tolls have increased in recent years due to water shortages, but they apply equally to ships from all countries. Chinese companies are active in Panama, but there is no evidence so far of their meddling in the canal itself.
Panama says it won’t give up the canal, which handles 6% of global trade. But if Trump wants to force the issue, there’s little the tiny country could do. Probing a company based in Hong Kong, a nominally autonomous city-state that has fallen under stricter Chinese control in recent years, is a sign Panama wants to head off a bigger crisis.
Trump’s response to the probe will tell us a lot. If he’s using threats to secure preferential rates for US ships, then a peaceful resolution is possible. But if he thinks direct control is essential in a zero-sum global competition with China, then the probe won’t move him, and things could get frothier fast.
If so, the question in Panama – as in Greenland, which Trump also wants – will quickly become: What other global powers might Panama turn to for help?
Donald Trump faces reporters in the Oval Office on Sept. 11, 2020.
Trump vs. world
The relevant foreign leaders are having none of it. Greenland remains a part of Denmark, though it has governing autonomy on many issues, and Denmark is a member of the European Union. In response to Trump’s latest salvo, French Foreign Minister Jean-Noël Barrottold French radio “there is obviously no question that the European Union would let other nations of the world attack its sovereign borders.”
Panama's Foreign Minister Javier Martínez-Achasaid Tuesday that “the only hands operating the Canal are Panamanian and that is how it is going to stay.” The US managed the Panama Canal for decades until a treaty signed by the late US President Jimmy Carter in 1977 gave Panama full control in 1999.
And Canada’s outgoing Prime Minister Justin Trudeau said that Trump’s suggestion that the US and Canada should be part of a single country didn’t have "a snowball's chance in hell" of happening.
The odds of Trump accomplishing any of those goals is minuscule. His bargaining, in business and in politics, has always begun with startling demands meant to shock and awe the other side into concessions. But now other governments know that – and they’re more likely than during his first term as president to meet his blunt challenges with blunt responses.
What Trump's Panama Canal threats reveal about today's geopolitics
Ian Bremmer's Quick Take: A Quick Take to kick off your Merry Christmas week. Maybe it'll be a little bit quieter, but it doesn't feel that way these days.
I wanted to talk a little bit about the statements from President-elect Trump about the territories that he seems to have some interest in. Over the last day, we've had statements that the US should take the Panama Canal, and some memes being posted by Trump and the vice president-elect. And he said that it used to belong to the United States, the Panama Canal, and President Jimmy Carter foolishly gave it away. And now he wants it back. And is it because he's angry that the Panamanian government is claiming that he owes lots of taxes for Trump properties? Maybe. Certainly, the governments don't like each other. The Panamanian president came out and said sovereignty and independence of his country are not negotiable, not surprisingly.
And then, Trump with another statement, and it's not the first time, saying that ownership and control of Greenland is an absolute necessity. In his first administration, he wanted to try to buy it. Denmark said no. Now he's saying, "Look, national security reasons for the United States, absolute necessity, that's like pretty much 100%, right? So, got to take Greenland over." And the Greenland prime minister has said it's very much not for sale.
So, look, what are we talking about here? Well, first, national security reasons are of course defined by the United States as the most powerful country. That is a different type of US exceptionalism. Historically, US exceptionalism was more about the idea that the Americans actually had right on their side, and so their values were somehow different and better than those of other countries.
Now, it's more about we want it. It's for our national security. It has nothing to do with values, but we can get away with it because we are stronger. Now, lots of countries do this. Russia they have made that argument about Crimea, which used to belong to the Soviet Union under the leadership in Moscow and the Russian Federation first among equals. And then was given to the Ukrainians by Khrushchev, which I remember Elon Musk referred to as "Khrushchev's mistake," which seemed the kind of thing he wouldn't come up with and would've heard from the Kremlin. Now they want it, and they want it because it was historically theirs, and they shouldn't have given it back. And so, it doesn't matter if the Ukrainians have sovereignty, and the locals wanted to be a part of Russia anyway, which is true in the case of Crimea. Not in the case of the Southeast Ukrainian territories that the Russians presently occupy.
But of course, it's against international law. Having said that, against international law, when you're the more powerful country, doesn't seem to matter very much in today's international environment. Certainly not as much as it used to. That's why Ukraine is going to get partitioned, and Ukraine is going to have to accept a loss of territory de facto in order to maintain security guarantees going forward. We see this in terms of China and the "nine-dash line" in the South China Sea, which clearly is ridiculous, if anyone that looks at a map recognizes that China should have no claim on all of this territory and the resources inside that territory. But China's more powerful than all these other countries, like Indonesia, and the Philippines, and so they can get away with a lot more.
Israel in the West Bank, and more territory that they're taking, and more territory just in the last couple of weeks that they say is temporary. But for how long? Who knows. Near the Golan Heights, strategically important for them, national security reasons, so it's ours, right? That is where we are heading.
And does Trump mean it? Probably not. He didn't mean it last time with Greenland. It's just a negotiating stance, and he exaggerates a fair amount. And he's looking to both say things that amuse him and put other countries on the back foot. Just like he did with Prime Minister Justin Trudeau in Canada who is facing a much harder domestic political time because Trump is making him look like an idiot on the international stage, and Trump and the US are a lot more powerful than Trudeau in Canada.
But it does matter if the United States doesn't support international law. It does matter if the US is not interested in upholding its existing trade deals, its existing collective security agreements. And unlike in 2016, when Trump won for the first time, this time around there's more legitimacy to it in the United States. And what I mean by that is, Trump won, and he won the popular vote. And he almost got 50% of all of the voters in the United States. And it's not like Americans don't know what Trump did, don't know what he's accused of, don't know his role around January 6th, don't know what he's intending to do going forward. They're fully aware of this, and they voted for him anyway. Or maybe I should say they voted for him in part because of that.
So, you don't get to blame the Russians, which was farcical back in 2016, but no one's even trying to make that argument now. Trump won, and Trump won on an agenda that he is now very much moving forward with. And that is going to be a big issue for other countries because they are a lot less powerful than the United States. Elon Musk, similar challenge here, acting in many ways as the most powerful person in the US government after Trump. Certainly the most unfettered, and when he comes out publicly and says that Germany's in trouble if it's not for the alternatives for Deutschland, the AFD, it's not close to a majority of support in Germany, but the German government's in trouble. And he will push for more support for a Euro-skeptic group. Very far on the right in the German political spectrum, and the German government is going to be scared.
How much do you want to go after Elon and push him back when you know that he has the full support of the American president? Do you really want to fight with him? And the answer is a lot less than you would've been willing to fight with him before Trump won. So, I think all of this is really creating a much more transactional law of the jungle global space, where both the United States, and China, and a number of other countries are increasingly playing by a very similar lack of rule book if you will. And we're becoming more a world of winners and losers, as opposed to a world of leaders that bring people together, and that is a problem. We've experienced that in the past, but we haven't experienced it when the challenges are so obviously larger, the national challenges.
So, clearly global challenges when it comes to climate, or it comes to AI, when it comes to the proliferation of dangerous weapons. So, clearly a much more dangerous environment is the consequence of all of that, and that's how I think I respond to what I see from Trump. Not that it's so different from what we're seeing from other countries, but precisely because it's so similar, and because those are countries that the Americans historically are like, "No, no, no, we don't play by that." And that's increasingly where we are. So, anyway, a lot that we'll be looking towards in 2025, and a very, very volatile geopolitical environment. Merry Christmas to everyone. Hope you have a happy New Year, and I'll talk to you all real soon.
A ship passes through the Panama Canal's Culebra Cut, heading northbound for the Caribbean, Dec 30. The Canal, built and operated by the United States, will transfer to Panamanian control at a noon ceremony on December 31.
Trump talks of taking the Panama Canal - and jokes about Elon Musk
The President-elect is also making waves for saying that the United States must"retake" control of the Panama Canal. At a rally in Arizona on Sunday, Trump claimed that the canal's 1999 handover to Panama under the terms of an agreement signed by President Jimmy Carter was a "terrible mistake" and argued that the US must act to stop being“ripped off” by Panama and thwart the influence of China in the region.
The Panama Canal, built and managed by the US for decades, handles 2.5% of global ocean traffic, facilitating US imports from Asia and exports of key commodities including LNG.
At the same rally, Trump addressed chatter about Elon Muskusurping the US presidency. Last week, Musk had unsuccessfully attempted to sway Republican members of Congress to oppose US President Joe Biden’s latest spending bill, prompting fears of a government shutdown and accusations that Musk was acting like the President instead of an unelected advisor.
On Sunday, Trump joked that the South African native “is not going to be president. That I can tell you. I’m safe. You know why? He can’t be. He wasn’t born in this country.”
Asylum seekers wait outside the foreign office in Brussels, Belgium.
Crackdowns against asylum-seekers gain momentum in Europe and the Americas
On both sides of the Atlantic, a range of countries adopted new measures to clamp down on asylum-seekers this week, amid rising concern about the political impacts of immigration.
Panama began US-funded deportation flights as part of an agreement with Washington to stem the flow of hundreds of thousands of people who transit the country annually en route to the US border. Immigration is the number-two top issue for US voters right now.
Brazil announced it will crack down on layovers who request asylum, after finding that many of them simply use refuge in Brazil as a jumping-off point for northward journeys to the US or Canada.
Hanging over all of this: Some 40% of Venezuelans say they may leave the country if Nicolas Maduro remains in power. Their exodus would exacerbate what is already the world’s largest external refugee crisis.
Across the pond, the UK, reeling from recent anti-immigrant violence, pledged a raft of new measures to stop asylum-seekers from coming, staying, or working in the country. Immigration is now the top issue for UK voters — the first time since the European immigration crisis of 2016, which helped fuel Brexit.
And Hungarian PM Viktor Orban took a page from Texas Gov. Greg Abbott’s book, promising one-way tickets to Brussels for undocumented migrants who arrive in Hungary. The threat comes after the EU fined Budapest for a strict border policy that is out of step with common EU rules.