Taken for granted that he means absolutely literally what he proclaims publicly and in the style of a war telegraph, Donald Trump is determined to take over, even by force if necessary, the Panama Peninsula. And at the same time buy Greenland, making an offer that supposedly no one will be able to refuse, let alone the semi-autonomous indigenous peoples and the government of Denmark.

Both dynamic actions of the soon-to-be US president are not only dictated by some imperialist-style frenzy – and especially, in its traditional overt version. Besides, in the logic of the forthcoming “Trump Part II” presidential term even the last pretences seem to be abandoned. Trump refers to Canada as “the 51st state of the United States”, calls Justin Trudeau “governor” rather than prime minister of the country, and so on.

What Trump is now advocating is the overriding need to protect and further consolidate US interests in two critical regions of the world, Panama and Greenland. However, there is an additional common feature that creates the coupling bond between two completely different countries: the threat of Chinese expansion. In both tiny and tropical Panama – the southernmost tip of Central America – and in vast and arid Greenland in the northernmost reaches of the Americas, Donald Trump sees the onslaught of the Chinese. Hence, he calls for immediate and appropriate measures to be taken in order for the US to defend interests it considers vested, but also to avoid being in the uncomfortable position of being the tail behind China in vital areas such as international trade and maritime transport, energy and industry.

“Lest they fall into the wrong hands,” is Trump’s quote, a phrase that encapsulates the new planetary leader’s anxiety about both who will control the Panama Canal and who will be the one to exploit and reap the geological treasures that Greenland’s soil hides beneath layers of ice that are melting and evaporating due to the climate crisis. Which, by the way, Trump himself scorns as a hoax.
The issues raised by his recent statements involve two dimensions: the first is whether the allegations of ruthless Chinese expansionism, especially in Panama and Greenland, are valid. The second, but directly related to the previous one, relates to whether as the next US president Trump will not limit himself to rhetorical rhetoric, but will move on to the actual implementation of his plans to restore international law and order, as he understands them of course, in Panama and Greenland.

The Chinese guards

Trump’s penchant for unleashing rhetorical fireworks is well known and unexceptional. Clearly, however, this penchant for hyperbole and fanning public tensions did not prevent him from convincing the majority of his fellow citizens that he deserved a second term in the White House rather than his rival, Kamala Harris. In this context, with respect to Panama, Trump schematically argues that the local government is robbing US ships by imposing an unjustifiably exorbitant tariff on canal transit fees. And in connection with this, according to Trump, Panama has inadvertently ceded the management of the entire operation to Chinese interests. He even went so far as to sarcastically wish “happy holidays” to the Chinese soldiers who are supposed to guard the canal.

Panamanian President Jose Raul Mulino, who is staunchly pro-American and has said he is eager to begin working with the Trump administration, flatly denied the comments about Chinese occupation of the canal. “For God’s sake, there are no Chinese soldiers in the canal. The crossing is free for the whole world.” He even made it clear that “the canal, like everything around it, belongs to Panama and only Panama.”

Nevertheless, Donald Trump’s comments are not entirely unfounded. China is systematically trying to spread its influence and commercial interests throughout Latin America. In this informal ‘Chinese invasion’, Panama is by definition a key point. Already, two of Panama’s five cargo piers have passed into the ownership of Hutchison Whampoa, a company listed on the Hong Kong Stock Exchange and essentially a Chinese interest. Two other ports are owned by companies from Singapore and Taiwan. Thus, of Panama’s five trade gateways, the US controls only one.

In the footsteps of Reagan

Continuing an old tradition of suspicion or even outright hostility towards Panama, the latest inflammatory statements by Donald Trump seem like a rehash of Ronald Reagan rhetoric from the 70s. Referring back to the distant past, to the early 20th century, back when the Americans were entirely in charge of the colossal technical project of opening the canal, Reagan was quoted as saying, “We bought it. We bought it. We bought it, we paid for it, we built it. And we Americans have a legal right of ownership to the Panama Canal.”

In a similar tone, Trump proclaims, with his usual air of unshakable certainty, that “the U.S. Navy, like our merchant fleet, is being treated very unfairly and unfairly.” He further says that “the canal transit fees are unacceptable, totally unfair, especially considering the incredible generosity our country has shown to Panama. I think we have acted foolishly in helping them so much. Panama’s robbery of our country will end immediately. We will demand the return of the Panamanian Diocese of Panama to the United States. And we will do this comprehensively, quickly and without asking anyone. I will not tolerate it any longer.

Someone should inform the Panamanian officials about this.” Indeed, when President Mulina responded to these provocations that “we will defend our country,” Trump retorted, almost brandishing the hatchet of war, that “we’ll see about that.”

Beyond the exchange of sniping, albeit exploratory at the moment, a reputable international outlet like the Wall Street Journal is attempting to restore the truth around what is actually happening today at the Panama Canal. In an article, it points out that, first of all, there is no unequal treatment of US ships. Every vessel, regardless of the flag of the state under which it sails, is charged under a uniform service tariff.

Certainly there is a complex system of calculating tolls, as factors such as size, weight, type of cargo carried, etc. are taken into account – hence the fees for commercial vessels handling finished goods are higher than those carrying raw materials and bulk cargo. The amount of the transit charges is set by the Canal Management Committee. The authority in charge of managing the canal is independent, but its financial results are controlled by the Panamanian Government and Congress. As for the profits generated, they are channelled into the country’s national treasury. So far there has been no suspicion of mismanagement or fraud.

$4 million for a single crossing

The tolls charged by the State of Panama to each passing vessel amount to $5 billion annually. Recently, however, the cost of transit has skyrocketed: for a tanker, for example, while the price used to range from $300,000 to $400,000, it can now go up tenfold.

Thanks to the canal, ships sailing between the Pacific and the Atlantic cover only 82 km on land instead of 15 300 km at sea – with all that this implies in terms of fuel costs, time (the additional delay is of the order of 25 days), but also the ever-present risks inherent by definition in the Cape Horn, Chile, etc. Nevertheless, over the last two years, shipping companies around the world have ceased to rule out a circumnavigation of South America. The drop in transit fees is forcing shipowners to review profits and losses, de facto calling into question the once unrivalled advantage of the Panama Canal.

As Donald Trump rightly points out, the Panamanian government has been forced to raise the price of using the ferry. But, contrary to his interpretation, the fee increase has nothing to do with any kind of authoritarianism and was not imposed under pressure from Chinese influence as part of an undeclared trade war between China and the US. Instead, Panama’s problem is related to the drought and the dramatic drop in levels in the canal’s main water reservoir, Lake Gatun. In addition to supplying the canal, this is the natural water supply reservoir for 60% of the inhabitants of the entire Panama Canal. So to halt the rate of decline in drinking water supplies, which would have been a disaster for Panama, officials decided to restrict ship transits through the canal despite the huge damage – over $1 billion – that inevitably caused to revenues.

At the same time, canal management created an alternative privilege program for certain users. Through an auction, certain “express passes” were given to shipping companies that did not object to paying more expensive fees in exchange for a significantly faster crossing. As is understandable, the precedents make up a very different picture from that projected by Donald Trump in his attempt to create polemical impressions against Panama. In any case, as several analysts note, the possibility of hollow threats on his part should not be ruled out. Behind the threat of armed intervention, taking over the canal, etc., there may simply be a bluff on Trump’s part, with the ultimate aim of extracting from the Panamanian government a more favourable charging regime for the transits of US ships.

The Panama adventure

Trump’s “hard rock” policy and its rhetoric of escalation is based, at least in part, on the historical background of the American relationship with the Panama Canal. In this sense, the view expressed by Ronald Reagan in the mid-1970s of US “legal ownership” of the canal was only incidental. After all, its management was only ceded by the Americans to the state of Panama in 1999, as provided for in the bilateral agreement concluded under the presidency of Jimmy Carter some 20 years earlier.

The canal was built by Americans and with American funding, exactly as Ronald Reagan aphoristically described it, during the period 1904-1914. The vision of realising a project of titanic proportions for the time – and beyond – belonged mainly to President Franklin Roosevelt, and until 1964 the Americans retained absolute and exclusive control of the canal. But when riots broke out by the locals, the US was forced to negotiate with Panama in a process that would take more than 10 years. Eventually, in 1977, a twin agreement was signed between Jimmy Carter and the then Panamanian leader, Omar Efren Torrijos, for a gradual concession of the canal, with the year 2000 as the horizon.

Meanwhile, at the close of 1989, the US had moved to intervene in Panama with armed force, aimed at overthrowing and capturing the corrupt dictator General Manuel Noriega. This bloody operation is surely somewhere in Donald Trump’s mind, although no one can predict which of his plans it fits in with. He firmly advocates ending military interventions in third countries – mainly because they are economically unsustainable – but suddenly he appears as if he has long been ready to go down the path of war as long as he prevents further increases in transit fees on the Panama Canal, as is predicted to happen from the beginning of 2025.

Denmark or China;

Panama’s land area is 75,500 square kilometers. Greenland’s is almost 30 times larger, reaching 2,175,600 sq km. Panama’s population is 4.3 million people, Greenland’s just 56,000. Panama’s strategic importance lies in its ferry canal, a passage that plays a primary role in world shipping. In Greenland, by contrast, the real value is invisible to the naked eye – at least for the time being. The Greenlandic puzzle will be solved when – or if ever – systematic extraction of rare earths from lands that are currently covered, almost 80%, by ice begins.

Geologists believe that Greenland is home to 43 of the 50 rare earth species – and in huge quantities. These natural resources are valuable for making batteries for electric vehicles, as well as for a range of applications in the field of green technology. Given that China is already on track to assert its dominance in the global electromobility market, Greenland automatically emerges as the number one target for conquest. So again, Donald Trump is vindicated in a way, since, as it turns out, his intention to buy Greenland outright may not be so outrageous and unheard of after all. It is simply that Greenland is under a peculiar regime of semi-independence from the Kingdom of Denmark, to which it is traditionally subject.

The indigenous Inuit have been recognized the right to claim full autonomy from Denmark, which they have not yet exercised. If they go ahead with their independence Greenland will be deprived of -generous- regular funding from the Danish state and will therefore be forced to exploit its natural resources in order to survive.

On the other hand, China has, already since 2009, shown great willingness to support the local economy and indirectly Greenlandic independence in return for expanding mining projects, drilling the ice to search for new deposits of rare earths, uranium, etc.However, the locals remain cautious, wavering between their desired autonomy from Denmark and the protection of the natural environment. The demands of the two perspectives on Greenland’s future are completely contradictory, while the Chinese are pushing and trying to penetrate the community of Arctic states despite the strong resistance they meet.

They face not only the US and United Europe, which feel threatened by China’s sweeping expansion to the West. Even the Greenlanders themselves are concerned about the future of their country, as they would in fact like to maintain their pure primitivism by continuing to live from fishing and hunting. Instead, the transfer of thousands of Chinese workers is de facto upsetting the cultural and ethnic balance, a phenomenon that frightens the Inuit. At the same time, the US for its part has managed to block a number of Chinese business ventures in Greenland, largely neutralizing the extraction of materials and the establishment of natural resource exploitation facilities.

It goes without saying that the locals are signalling to everyone – Americans, Chinese, Russians, etc – that their country is not for sale and never will be. Trump in particular was given the same answer in 2019, when he first expressed his intention to acquire the country. In practice, however, a secret and long-running Cold War is raging on Greenland’s soil, with the main stakes being the revelation of the country’s natural wealth in the wake of the disappearing ice caps. That’s why Donald Trump argues that “national security and freedom protection concerns around the world compel the US to view ownership and control of Greenland as an absolute necessity.”

In the eyes of a businessman like Trump, Greenland is a “fillet” of supreme geostrategic importance, a base for the development of every kind of activity – from trade and the movement of goods to the assertion of American power in space. It should not be forgotten, moreover, that under a special agreement with the Danish government the Americans have established in Greenland the highly important Pitufik Space Base (formerly Thule Air Base). The mission assigned to the American military personnel stationed there is to keep a watchful eye on activity in space and to detect and warn of any missile attacks by hostile forces in good time. Not coincidentally, the spot where the US Space Base in Greenland is located is called the “Top of the World.”