Panama Canal CEO Says Meeting Trump’s Demands ‘Will Lead to Chaos’
Canal executive says China doesn’t control route and U.S. ships can’t get better rates than others
By Costas Paris The Wall Street Journal
PANAMA CITY, Panama— The leader of the Panama Canal Authority denied President-elect Donald Trump’s claims that China is controlling the vital trade route and said Trump’s suggestion that U.S. ships get preferential rates “will lead to chaos.”
“The accusations that China is running the Canal are unfounded,” Ricaurte Vásquez Morales said in an interview Wednesday. “China has no involvement whatsoever in our operations.”
“Rules are rules and there are no exceptions,” Vásquez Morales said. “We cannot discriminate for the Chinese, or the Americans, or anyone else. This will violate the neutrality treaty, international law and it will lead to chaos.”
Since winning the November election, Trump has repeatedly raised the idea of taking over the Panama Canal from Panama. On Tuesday, Trump said, “China’s basically taken it over. China’s at both ends of the Panama Canal. China’s running the Panama Canal.”
A Chinese company has operated two ports on either end of the canal for decades, but the canal itself is run by the Panama Canal Authority, a state entity whose board is selected by the Panamanian government. Control of the canal was gradually given back to Panama as a result of a 1977 treaty signed by former President Jimmy Carter.
“The sovereignty of our canal is not negotiable,” Javier Martinez-Acha, Panama’s foreign minister, said Tuesday. “It is part of our history of struggle and an irreversible conquest.”
At his news conference, Trump said Panama was seeking $3 billion to repair the canal and charging American shipping and U.S. Navy vessels higher fees for passage.
Vásquez Morales said Panama hadn’t requested any U.S. funds to improve the canal and he wasn’t aware what $3 billion Trump was referring to because the authority funds repairs through its own revenues.
The Panamanian executive, who has run the canal authority since 2019, denied that the authority charges U.S. vessels higher rates. The only exception to its rules, Vásquez Morales said, is that priority passage is given to U.S. Navy vessels in accordance with the treaty.
Rates are set by the size and type of ship, though the canal also runs auctions for slots for time-sensitive cargo. As he spoke, a Chinese-owned container ship loaded with thousands of boxes for Amazon.com and other U.S. retailers passed through the locks heading for Houston.
Tolls average about $750,000 per crossing, though they can range between $300,000 and $1 million. “They apply to all ships from around the world and there are no exceptions,” Vásquez Morales said.
Shortly before the canal formally changed hands, the Panamanian government offered long-term leases to operate cargo terminals on either side of the waterway at ports in the Pacific Ocean and the Caribbean Sea.
Hong-Kong based Hutchison Whampoa won the bidding for two of the leases and operates a terminal on each end. The other terminals are operated under long-term leases by PSA Singapore, Seattle-based SSA Marine and Taiwan-based Evergreen Marine.
Write to Costas Paris at costas.paris@wsj.com