Panama Canal is not for sale, Panama’s president says. What to know about the canal’s history and status

President-elect Donald Trump has repeatedly suggested the United States take over the Panama Canal, a shipping waterway that cuts across Central America, unless fees for using the canal are lowered. 

Panama’s leader shot back in a recent statement, saying the waterway is not for sale. Since then, Trump has posted repeatedly about the canal. 

It’s the latest in a series of similar statements from Trump, who recently suggested the United States take over Greenland, an idea he also floated during his first presidency. He’s also joked about Canada being a U.S. state.  

Here’s what to know about the history of the Panama Canal and the United States’ involvement with the shipping lane.  

History of the Panama Canal 

The Panama Canal was built by the United States between 1904 and 1913, and opened in 1917. Building the canal cost about $375 million, making it the most expensive construction project in U.S. history at that time, according to the Panama Canal Authority. Thousands of laborers died during the grueling construction process.

The canal connects the Pacific and Atlantic Oceans, offering ships a shortcut to avoid going around the tip of South America. The canal revolutionized shipping traffic in the region.  

The U.S. acquired the rights to build and operate the canal in the early 20th century, but at the time, Panama was in the process of seceding from Colombia, whose senate was refusing to ratify a treaty that would allow the canal to be built, according to the State Department’s Office of the Historian. 

To ensure the canal could be built, then-President Theodore Roosevelt supported Panamanian independence, and in 1903, the U.S. and Panama signed a treaty that established permanent U.S. rights to a “Panama Canal Zone” that stretched across the nation. However, the person who negotiated on Panama’s behalf did not have formal consent from the nation’s government and had not lived in the country for 17 years, causing many Panamanians to question the treaty’s validity, according to the Office of the Historian. 

Throughout the 20th century, the U.S. and Panama dealt with tensions surrounding the canal, including a riot in the 1960s that led to a brief disruption in diplomatic relations between the countries. In 1967, the U.S. and Panama began negotiating a new treaty, eventually reaching an agreement, but a change in elected leaders and a coup in Panama led to the establishment of a new government in the Central American nation, according to the Office of the Historian. Because of that, the negotiations “suffered a major setback.” 

Negotiations continued through the ’70s. When Jimmy Carter was elected president, he made concluding the negotiation process a priority, and in 1977, two treaties were submitted to the U.S. Senate: the Neutrality Treaty, which said the U.S. could use its military to defend the canal, allowing “perpetual U.S. usage” of the waterway, and the Panama Canal Treaty, which would end the existence of the Panama Canal Zone and allow the canal to be turned over to Panama in December 1999. As part of the second treaty, Panama would also become primarily responsible for defending the canal.

The treaties, collectively known as the Torrijos-Carter Treaties, were signed on Sept. 7, 1977. In the spring of 1978, the U.S. Senate voted to ratify the treaties, and Carter signed them into law on Sept. 27, 1979. The canal was transferred to Panama on Dec. 31, 1999, during the Clinton administration. 

Who operates the Panama Canal? 

The Panama Canal has been owned and operated by the Panama Canal Authority, a government-owned agency, since 1999. The agency was established shortly before the canal was returned to Panama. 

Since taking control of the waterway, the Panama Canal Authority has invested billions in expanding the canal. A $5.25 billion expansion of the canal opened in 2016, doubling the waterway’s capacity and cutting global maritime costs by an estimated $8 billion a year, CBS News previously reported. The expansion also allowed larger ships to pass. 

Who uses the Panama Canal? 

About 40% of the world’s cargo ship traffic moves through the Panama Canal, CBS News previously reported, though recent droughts have forced operators to reduce ship crossings. 

About two-thirds of the traffic in the canal is either headed for or leaving the United States, though ships from all over the world use the waterway each day, according to the Panama Canal Authority. 

Between 13,000 and 14,000 ships use the canal each year, the agency said. 

Trump and Panamanian president clash 

Trump first seemed to suggest the United States should take over the Panama Canal in a TruthSocial post on December 21.

He also raised the issue to a crowd of supporters at Turning Point’s AmericaFest on Sunday, where he said Panama is charging “exorbitant prices” and said the “complete ripoff of our country will immediately stop.” 

“If the principles, both moral and legal, of this magnanimous gesture of giving, are not followed, then we will demand that the Panama Canal be returned to the United States of America, in full, quickly and without question,” Trump said. 

On Wednesday, Trump said he would nominate Miami-Dade International Trade Consortium member Kevin Marino Cabrera to be the U.S. ambassador to Panama. In that announcement, he accused Panama of “ripping us off on the Panama Canal, far beyond their wildest dream.” 

Trump continued to post online about the U.S. regaining ownership of the canal, and referenced the canal in a Christmas Day message shared on TruthSocial. He warned of potential influence from China at the shipping waterway, though there is no Chinese presence at the canal, according to Reuters. A Hong Kong-based company manages two ports along the canal, Reuters said. 

Panama President José Raúl Mulino said in a statement shared on social media that “every square meter” of the canal “belongs to Panama and will continue belonging to Panama.” 

“We’ll see about that!” Trump wrote online in response.