Panama Resists U.S. Canal Push With Little Clout

Panama’s President José Raúl Mulino declared on March 27, 2025, that no U.S. military bases will return, responding to whispers of American pressure. His statement, delivered in a press conference, counters threats from U.S. President Donald Trump to reclaim the Panama Canal.

Mulino insists Panama’s sovereignty remains non-negotiable, rooted in a history of resisting foreign control. The Panama Canal, built by the U.S. from 1904 to 1914 at a cost of $375 million ($8.6 billion in today’s dollars), handles 5% of global trade today.

Panama assumed full control in 1999 after decades of U.S. dominance, including 14 bases with 65,000 troops at their peak. Trump now claims China influences the canal, a charge Panama denies, and seeks to restore U.S. authority, even hinting at force.

Panama lacks an army, disbanded in 1990 after the 1989 U.S. invasion to oust Manuel Noriega, leaving 25,000 personnel for security. Its $800 million defense budget pales against the U.S.’s $877 billion, raising doubts about Panama’s ability to resist.

Panama’s Canal Controversy

The 1977 Neutrality Treaty ties U.S. protection to the canal’s openness, complicating Mulino’s stance. Tensions flared in December 2024 when Trump vowed to retake the canal, built with 5,600 lives lost, now generating $4.6 billion yearly for Panama.

Recent reports suggest U.S. Southern Command explores options, from cooperation to troop increases, amid claims of a letter proposing joint canal management. Mulino dismisses such talk as baseless.

Historically, Panama fought hard for independence, with 1964 riots killing 21 locals over U.S. control marking a turning point. The U.S. once proposed a drug-fighting center post-handover, but Panama refused.

Today, Trump’s focus reflects fears of China’s $150 billion investments in Latin America, though Panama recently rejected China’s Belt and Road Initiative. Mulino’s pledge carries weight for Panama’s 4.4 million people, reliant on the canal for 6% of GDP.

Yet, without military might, Panama leans on diplomacy and its strategic value. Observers question if this defiance holds against a superpower, as the canal’s future hangs in a delicate balance of power and pride.

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