In a recent post on Truth Social, President Donald Trump called for American access to two of the world's most strategic waterways, demanding that transit fees for US ships be removed immediately.
What Happened: Trump wrote that “American ships, both military and commercial, should be allowed to travel, free of charge, through the Panama and Suez canals!” He stressed that both waterways would “not exist” without U.S. intervention and assigned Secretary of State Marco Rubio to “immediately take care of” the situation.
In response, the Guardian reports, Panamanian President Jose Raul Mulino subtly noted that the Panama Canal Authority (ACP), an independent agency, controls toll policies, saying, "There is no agreement to the contrary."
Earlier this month, U.S. Defense Secretary Pete Hegseth visited Panama City and implied that U.S. warships should have priority and free access through the canal. He also proposed that American troops could return to secure it, but this idea was rejected by Panama.
The debate over the Suez Canal occurs at a time when its revenues have witnessed a sharp fall. Egypt reported a 60% decrease in canal earnings in 2024, leading to a $7 billion loss, mainly on account of tensions caused by Houthi rebel attacks on shipping in the Red Sea.
Since January 2024, the U.S. military has been attacking Houthi positions, and Trump has said that strikes will continue until the rebels are no longer a threat to U.S. operations in the region.
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Why It Matters: Trump's demands could put pressure on relationships with both Panama and Egypt, the two countries that supervise these key trade routes under their sovereign authority. With China and America among the main users of the Panama Canal, any effort to change the fee structure could muddle an already fraught global shipping landscape.
Trump's demand for free access through the Panama and Suez canals could be seen as an aggressive attempt to reassert American influence over major maritime chokepoints. According to Will Freeman of the Council of Foreign Relations, a "lighter touch" is likely to yield better results.
In March, a BlackRock Inc. (NYSE:BLK) -led consortium agreed to acquire a majority stake in Panama Ports Company, which operates the Balboa and Cristóbal ports, for $22.8 billion. This deal, including 90% of the company, is part of a larger sale of port operations by Hong Kong’s CK Hutchison.
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