Trump threatens to try to take back the Panama Canal. Panama's president balks at the suggestion

PHOENIX (AP) — Donald Trump suggested Sunday that his new administration could try to regain control of the Panama Canal that the United States “foolishly” ceded to its Central American ally, contending that shippers are charged “ridiculous” fees to pass through the vital transportation channel linking the Atlantic and Pacific Oceans.

Panama's conservative president José Raúl Mulino, who was elected in May on a pro-business platform, roundly rejected that notion as an affront to his country's sovereignty.

The Republican president-elect's comment came during his first major rally since winning the White House on Nov. 5. He also basked in his return to power as a large audience of conservatives cheered along. It was a display of party unity at odds with a just-concluded budget fight on Capitol Hill, where some GOP lawmakers openly defied their leader's demands.

Addressing supporters at Turning Point USA’s AmericaFest in Arizona, Trump pledged that his “dream team Cabinet” would deliver a booming economy, seal U.S. borders and quickly settle wars in the Middle East and Ukraine.

“I can proudly proclaim that the Golden Age of America is upon us,” Trump said. “There’s a spirit that we have now that we didn’t have just a short while ago.”

His appearance capped a four-day pep rally that drew more than 20,000 activists and projected an image of Republican cohesion despite the past week's turbulence in Washington with Trump pulling strings from his Mar-a-Lago resort in Florida as Congress worked to avoid a government shutdown heading into the holidays.

House Republicans spiked a bipartisan deal after Trump and Elon Musk, his billionaire ally, expressed their opposition on social media. Budget hawks flouted Trump's demand that they raise the nation’s debt ceiling, which would have spared some new rounds of the same fight after he takes office on Jan. 20, with Republicans holding narrow control of the House and Senate. The final agreement did not address the issue and there was no shutdown.

Trump, in his remarks in Phoenix, did not mention the congressional drama, though he did reference Musk's growing power. To suggestions that "President Trump has ceded the presidency to Elon,” Trump made clear, “No, no. That’s not happening.”

“He’s not gonna be president,” Trump said.

The president-elect opened the speech by saying that "we want to try to bring everybody together. We’re going to try. We’re going to really give it a shot." Then he suggested Democrats have “lost their confidence” and are “befuddled” after the election but eventually will ”come over to our side because we want to have them.”

Atop a list of grievances — some old, some new — was the Panama Canal.

“We’re being ripped off at the Panama Canal,” he said, bemoaning that his country ”foolishly gave it away.”

The United States built the canal in the early 1900s as it looked for ways to facilitate the transit of commercial and military vessels between its coasts. Washington relinquished control of the waterway to Panama on Dec. 31, 1999, under a treaty signed in 1977 by President Jimmy Carter.

The canal depends on reservoirs to operate its locks and was heavily affected by 2023 Central American droughts that forced it to substantially reduce the number of daily slots for crossing ships. With fewer ships using the canal each day, administrators also increased the fees that are charged all shippers for reserving a slot.

With weather returning to normal in the later months of this year, transit on the canal has normalized. But price increases are still expected for next year.

Mulino, Panama's president, has been described as a conservative populist who aligns with Trump on many issues. Panama is a strong U.S. ally and the canal is crucial for its economy, generating about one-fifth of that government’s annual revenue.

Still, Trump said, that, once his second term is underway, "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.”

“I’m not going to stand for it," Trump said. "So to the officials of Panama, please be guided accordingly.”

He did not explain how that would be possible.

Shortly after Trump's speech, Mulino released a video declaring that “every square meter of the canal belongs to Panama and will continue to belong” to his country.

Without mentioning Trump by name, Mulino addressed Trump's complaints over rising fees for ships crossing the canal, saying they are set by experts who take into account operational costs, and supply and demand factors.

“The tariffs are not set on a whim” Mulino said. He noted that Panama has expanded the canal over the years to increase ship traffic “on its own initiative,” and added that shipping fee increases help pay for improvements.

“Panamanians may have different views on many issues” Mulino said. “But when it comes to our canal, and our sovereignty, we will all unite under our Panamanian flag.”

Trump then took to his social media site to offer in response, “We'll see about that!" He also posted a picture of a U.S. flag planted in the canal zone under the phrase, “Welcome to the United States Canal!”

The canal aside, Trump’s appearance at Turning Point’s annual gathering affirmed the growing influence the group and its founder, Charlie Kirk, have had in the conservative movement. Kirk’s group hired thousands of field organizers across presidential battlegrounds, helping Trump make key gains among infrequent voters and other groups of people that have trended more Democratic in recent decades, including younger voters, Black men and Latino men.

”You had Turning Point’s grassroots armies,” Trump said. “It’s not my victory, it’s your victory.”

Trump on Sunday also announced several new members of his incoming administration, most notably:

-Stephen Miran, who worked at the Treasury Department in Trump's first term, to lead the Council of Economic Advisers, an executive branch agency charged with providing objective economic advice to the president.

—Callista Gingrich to be the U.S. ambassador to Switzerland. Gingrich was U.S. ambassador to the Holy See in Trump's first term. She is married to former House Speaker Newt Gingrich.

Separately, Australian billionaire Anthony Pratt announced he was donating $1.1 million to Trump’s inaugural fund to complement the $14 million that he said he already had given to the Make America Great Again Inc. super political action committee — making him one of the president-elect’s top donors.

Pratt is chairman of Pratt Industries, which uses recycled paper and boxes as a raw material in a process that produces new cardboard.

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This story has been corrected to reflect that Panama's president Mulino was elected in May, not April.

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Weissert reported from West Palm Beach, Florida. Associated Press writer Manuel Rueda in Bogota, Colombia, contributed to this report.