Another week another policy statement from Donald Trump. The latest is the suggestion, alongside the merger of Canada into the US and the annexation of Greenland, that the US re-take control of the Panama Canal. Speaking before Christmas he accused the Panamanians of charging too high canal fees and once in office he said he would end “this complete rip-off of our country”. He also accused the Panamanians of permitting China too greater influence over port operations commenting that “it’s being operated by China, China, and we gave the Panama Canal to Panama we didn’t give it to China. They’ve abused that gift”. The Panamanians responded, with the Panamanian Foreign Minister asserting that “the sovereignty of our canal is not negotiable”.
Donald Trump has now suggested that he would not rule out using force to regain influence over the Panama Canal. Asked on Tuesday, January 7, if he would rule out the use of force, he replied “I’m not going to commit to that. No. It might be that you’ll have to do something”, continuing, “But I can say this, we need them for economic security.” The accusations of Chinese influence appear to focus on the operation of container terminals in Panama by Hutchison Ports, which is a Hong Kong-based company and part of the well-known CK Hutchison group.
It is suggested by American journalists that these statements by Donald Trump are simply bargaining positions around his plans for tariffs and trade relations. However, the Wall Street Journal newspaper proposed that they are also an attempt to “carve out spheres of influence and defend their economic and security interests by imposing their will on smaller neighbours”. What Donald Trump appears to be grasping at is the re-orientation of global trade away from its present locus in China and towards the US. Accessing resource-rich areas such as Greenland and Canada would enable the US, which is already self-sufficient in energy, to support the growth of its domestic supply chains in areas such as consumer products manufacturing or automotive. The dominance of economies such as Mexico would offer locations for lower-labour cost assembly operations. The Panama Canal would be of increased importance in such a new economic environment. This is not an entirely new approach as prior to the 1970s the US strove to rely on the resources of the Americas rather than the rest of the world.
The implication of these policies is that the pattern of world trade would re-structure, with the US emerging as a more important generator of both exports and imports. This implies an enhanced role for logistics infrastructure across the Americas but particularly in economies such as Canada and Mexico as well as the US. The US taking greater control of the Panama Canal could be just the beginning.
Source: Ti
Author: Thomas Cullen
