In his second inaugural address on Monday, President Donald Trump vowed to “take back” the Panama Canal, accusing China of operating the strategic waterway and criticizing its transfer to Panama at the end of 1999.

“Above all, China is operating the Panama Canal, and we didn’t give it to China, we gave it to Panama. And we’re taking it back,” Trump declared after being sworn in at the US Capitol.

The statement comes after weeks of Trump refusing to rule out potential US military action against Panama, despite the country’s repeated denials of Chinese involvement in the canal’s operations.

Panama has maintained full control of the canal since the United States handed it over, asserting its sovereignty over the vital shipping link between the Atlantic and Pacific oceans.

Trump called the 1999 handover a “foolish gift that should have never been made,” referring to the treaty signed by President Jimmy Carter in 1977 that facilitated the transfer.

Panama govt hits back

In a swift and sharp response to Trump’s comments, Panama’s President Jose Raul Mulino put out a statement on social media platform X– owned by Trump’s confidant, Elon Musk.

In the statement, Mulino said in no unclear terms that “The canal is and will remain Panama’s and its administration will continue to be under Panamanian control.”

“The Canal was not a concession from anyone. It was the result of generational struggles that culminated in 1999, as a result of the Torrijos-Carter treaty and, since then until now, for 25 years, without interruption, we have managed and expanded it responsibly to serve the world and its commerce, including the United States,” the statement said.

Mulino also stressed that China, or any other control, does not control the waterway.

pic.twitter.com/oEeBCpQnSl

— José Raúl Mulino (@JoseRaulMulino) January 20, 2025

The Panama Canal is a key trade route that handles around 6 per cent of global maritime traffic. It is a critical artery for international commerce.

With inputs from agencies