Save the Neutral Panama Canal

 

By David K. Shipler 

            PANAMA CITY, PANAMA—If President Trump takes over the Panama Canal, a wish he keeps pushing, he will be able to disrupt a significant chunk of global trade at his whim, rewarding and punishing countries he happens to like or dislike, as he has done with various measures in his first few weeks in office. The canal’s neutrality, enshrined in a US-Panama treaty, would be in jeopardy, and this shortcut between the Atlantic and Pacific Oceans would be compromised.

            On a trip through half the canal’s length last Sunday, and in subsequent research in two museums, I learned how easy it would be to weaponize the vital waterway. While most cargo through the canal is part of US trade, Trump could force long waiting times on certain other vessels, impose different fees for different countries, or even bar passage to ships transporting goods to or from disfavored nations.

That is, he could add the canal as a tool in the global and domestic protection racket that he has already devised with on-and-off tariffs, interrupted military aid, funding cuts to schools and universities, sanctions against lawyers who oppose him, and the like. Nothing in his behavior, even toward his own citizens, suggests that he would respect the Panama Canal’s universal accessibility, which served 170 countries last year.

Although Trump has railed against what he calls the high transit fees charged by Panama, it’s a good bet that his long-term desire is less about money than political leverage. His method of political leverage, based on bullying, would risk a popular backlash in Latin America, especially in Panama, and undermine US standing in the region.

Furthermore, the canal has water problems that only Panama can address from outside the strip that Trump wants to own.

The thoroughfare relies on fresh water from rivers and manmade lakes that also supply Panama’s growing population, so a competition for a precious resource has to be managed by the government and the Canal Authority. Because the canal crosses an isthmus created by volcanic eruptions about 3 million years ago, the land between the oceans is high in places, navigated through a series of locks that raise ships from the Caribbean by 85 feet, then lower them to the Pacific.

No pumps are needed. The water flows naturally into the canal and then, as the locks’ enormous gates are opened for each vessel, about 52 million gallons of fresh water course down from the chambers into the sea. When a drought hits, as it did in 2023, fewer ships are allowed to transit.

The Canal Authority could gobble up more water, but that would deprive Panamanians. Let’s guess how much Trump would care about water supplies for the people of Panama. A promised solution, under the authority’s plans, would dam the Rio Indio, west of the canal, displacing some 12,000 people for a new reservoir—a six-year, $900-million project. The residents have been protesting; they’re being promised relocation to new farmlands. Let’s guess how sensitive Trump would be to their plight.  

The canal is the product of dreams. In 1534, King Charles V of Spain sent a team to survey a route, but it was deemed impossible. In 1869, President Ulysses S. Grant ordered a survey; as an army captain, he had led a unit of men and their families across the isthmus on the way to California. Cholera killed 150 of them. In the late 1800s, France began a sea-level canal, but the depth of required excavations to cut through the highlands stymied the project, which ran out of money. The company was sold to the US, which completed the canal with locks in 1914 and operated it until a transfer to Panama began after President Jimmy Carter signed two treaties in 1977. The turnover was highly controversial, with most Republicans adamantly opposed. Ratification, requiring two-thirds of the Senate, barely passed, 68-32.

One treaty provided joint management until final transfer to Panama in 1999. The other commits both the US and Panama to “the neutrality of the Canal in order that both in time of peace and in time of war it shall remain secure and open to peaceful transit by the vessels of all nations on terms of entire equality, so that there will be no discrimination against any nation, or its citizens or subjects, concerning the conditions or charges of transit …”

Trump has shown no compunction about violating US laws, regulations, and international agreements, so the two treaties are, in practice, subject to his whim. How he would take the canal is a question, though. By whatever means, “there would be war,” one experienced canal worker told me. “Panama has many friends.”

Then, too, running the canal requires a plethora of skills, as anyone who sails through it can see. Timing ship traffic is tricky, and repairs to locks cannot be deferred. Some ten thousand workers are employed in specialized fields, including hydraulics, electrical systems, welding, water management, computer operation, and marine piloting of enormous vessels in confined spaces. Mishaps are a constant danger, with the possibility of catastrophic consequences. If the US seized the canal and Panamanian workers boycotted, the waterway would be closed for as long as it took the Trumpists to find and train replacements.

Panama’s government makes money from the canal, which apparently rankles Trump as he rants about fees. In fiscal year 2024, the Canal Authority’s revenue totaled $4.99 billion, with a net income of $3.45 billion, of which $2.47 billion went to Panama’s national treasury, 8 percent of the government’s budget. That’s not peanuts for Panama, but it’s less than four-hundredths of one percent of the US federal government’s $6.5 trillion budget, not enough to move the needle. Canal tolls averaged just $11.80 per ton of cargo.

            The fees are computed by complicated formulas that begin with base rates of $15,000 for the smallest ship to $300,000 for the largest vessels that can fit through the newest locks. To those rates are added fees per unit of cargo capacity or actual loads—for example, $2.05 per cubic meter of liquid natural gas in an enormous tanker, and $3.50 for a smaller ship; $2.75 per ton for a huge vehicle carrier, $6.00 for the smallest ship. Loaded containers are charged from $35 to $45 each.

            Additional fees include mandatory tugs, running from $2,000 to $30,000, depending mainly on the size of the ship; deck hands to secure lines; and $500 per cable attaching the ship to locomotives running alongside the lock. Last Wednesday, a big South Korean auto carrier squeezed into a lock with no more than a foot or two of space on either side. In the hands of a canal pilot on the bridge and six highly skilled locomotive operators, the cables were constantly adjusted so the ship threaded the needle perfectly and never even grazed the concrete walls. The toll added up to about $450,000, said a guide at the visitor’s center.

            The largest ship to pass through the newest locks, completed in 2016 at a cost of $5.6 billion, was as long as the Eiffel Tower and carried 13,926 containers. The highest toll so far, paid by the vessel Poland, was $1,205,511. The ship carried 13,935 containers. A lot of money, but just $86.51 per container, not bad for saving the three to four weeks it would take between the Atlantic and Pacific around Cape Horn. Ships have to wait an average of less than 24 hours to enter the canal, whose 51 miles can be covered in 8 to 10 hours.

            You don’t need warships to block the canal. All you have to do is commit passive resistance: not provide a tug, not open a lock, and not do lots of other things. No wonder, when Trump reiterated his demand to retake the canal as he spoke to Congress last week, Secretary of State Marco Rubio looked as if he had indigestion.