Panama City, Panama
CNN
—
The new Panamanian ambassador was given strict instructions as he prepared to meet then-President Donald Trump one day in 2019: Do not engage him in any substantive discussion of critical issues.
This was meant to be a carefully choreographed photo op, nothing more but a brief stop on the diplomatic conveyor belt as foreign ambassadors lined up in the West Wing to formalize their positions atop embassies across Washington.
But the instructions left Juan De Dianous unprepared for the brief interaction with Trump that followed. As he went to shake Trump’s hand, the president mentioned that in his experience there were “a lot of crooks” in Panama.
De Dianous died in 2021 and never sought to publicize or draw attention to the moment. But the story was relayed or confirmed to CNN by several former Panamanian government officials, who, like the rest of the world, are now grappling to divine Trump’s views on the Central American nation of 4 million people.
Through a series of social media posts and then most prominently during a press conference last week where he repeatedly railed against former President Jimmy Carter’s decision to give the Panama Canal over to Panama, Trump has set off a global guessing game about his intentions. His decision not to rule out the use of military force to retake the critical waterway escalated a dispute that seemingly appeared out of thin air.
Trump’s history with Panama may explain his threats about the canal
Current and former government officials, senior canal officials and residents in Panama are now left with plenty of questions, but few answers.
What prompted the latest outburst? Would Trump really green-light a US military invasion to retake the Panama Canal? Are his attacks intended as a broader brushback to China in an escalating battle over hemispheric influence?
Or perhaps, as some in Panama speculate, did some shipping magnate pal complain to Trump about rising canal tolls over dinner at Mar-a-Lago recently?
Interviews with more than a dozen people in Washington, Mar-a-Lago and during several days of reporting on the ground in Panama suggest Trump’s skeptical views of the country stretch back decades.
Trump expressed disdain for the 1977 deal to hand over the canal long before he entered politics, but his opinion of Panama was also forged by his personal experiences there. Those began with the 2003 Trump-owned Miss Universe contest held in Panama City and then as the public name and face of a high-end hotel and resort development that would become buried in litigation and long-running disputes.
Trump’s salvos prompted a swift response from Panamanian President José Raúl Mulino, who aggressively pushed back on social media and in local media interviews.
Mulino has since appeared to recalibrate as part of an intentional strategy to direct discussions through proper diplomatic channels once Trump officially takes office. There have been no signs of an emergency trip to Mar-a-Lago to curry favor with the president-elect.
Trump’s advisers point to plans for a more aggressive posture toward Beijing’s growing influence in Latin America as the driving force behind Trump’s comments.
But the truth for Panamanian officials is that in the absence of direct communications with the incoming administration or fact-based explanation from Trump himself, a vacuum has been created — left to be filled by any number of theories.
“He’s like a magician,” Jorge Quijano said of Trump as he raised his left hand and started waving. “You know, he wants you to look at this, this hand, and then he’s doing something else with the other. So really, his purpose — I don’t know what it is.”
Quijano, the Panama Canal Authority Administrator from 2012 to 2019, didn’t frame his point in a critical or pejorative manner. In fact, it’s one echoed repeatedly by current and former Panamanian officials who spoke to CNN. There is no dismissal of Trump’s social media posts, nor is there mockery or derision.
Trump’s words, whatever the platform, are taken seriously in the sense that there is a widespread belief that they’re signaling … something.
“We’ve communicated that we’d welcome conversations with the president-elect’s team,” one senior Panamanian government official told CNN. There hasn’t been a reciprocal desire on that front to this point, the official said.
As Quijano weighed Trump’s recent comments, he sat on a hotel balcony overlooking Panama Bay. Massive cargo ships were visible in the distance, waiting for their respective schedule times to traverse the locks on their 51-mile journey from the Pacific to the Atlantic.
The US built and operated the canal and its surrounding canal zone from its opening in 1914 until its official handover to the Panamanian government in 1999. One of the world’s busiest shipping passageways, roughly 4 percent of the world’s maritime trade and more than 40 percent of US container traffic traverse the 51-mile route across the Isthmus of Panama.
The canal has defined Quijano’s adult life. He started working there in 1975, two years before President Carter and Panamanian Leader Gen. Omar Torrijos signed treaties that would lead to its eventual handover.
Quijano makes clear he’s no politician, but he has a keen understanding of the political consequences of the deal Carter put in motion.
“Jimmy Carter lost because of what he did,” Quijano said referring to the Ronald Reagan’s 1980 presidential campaign, which was punctuated by sharp criticism of the treaties.
Quijano was sitting just off the main floor of the JW Marriott Panama, the same hotel that used to bear Trump’s name.
Trump first crossed paths with Panama in 2003. Back then, Trump owned the Miss Universe contest and that year the pageant was held in Panama City.
“My interest in Panama really began when we had the Miss Universe contest in Panama,” Trump said in a 2009 promotional video for a new hotel development.
“I was there for quite a bit of time with the Miss Universe and I fell in love with the place.”
Even then, Trump viewed Carter’s deal to hand over the canal as a mistake, according to two people who worked with the pageant’s operations and had regular interactions with Trump.
“He said more than once that the US got ripped off,” one of the people said. “It wasn’t a grand statement, just an observation he wasn’t shy about sharing.”
Trump’s specific views on the Panama Canal tracked with his long-standing contention that the US was being ripped off by foreign countries, largely due to poor negotiations and weakness in the ranks of government officials.
That view landed Trump in hot water as he toyed with a 2012 run for president at the same time he prepared for the grand opening of the Trump Ocean Club, the Trump licensed and Trump Organization-managed hotel.
Finished in 2011, the soaring 70-story, glass-façade resort remains the tallest building in Central America and marked Trump’s first major international property licensing deal.
But when Trump was quoted in a 2011 CNN story at the time saying the US “stupidly” returned the canal to Panama “in exchange for nothing,” the comments sparked local outrage and led Panama City’s municipal council to vote unanimously to declare Trump “persona non grata.”
Trump moved quickly to clarify, in an interview with the Panamanian newspaper La Prensa, that his comments had been “respectful of Panamanians for the excellent deal they closed” and that “U.S. negotiators, led by Jimmy Carter, did an extremely poor job.”
Trump continued in the days that followed to attack Carter and the treaties that led to the handover in a Fox News interview and would host the grand opening of the Trump Ocean Club a few months after that.
Panama’s president at the time, Ricardo Martinelli, attended the festivities.
The soap opera-like roller coaster the consumed the years that followed with the building could fill several file cabinets based on the legal filings alone, but the short version is that by 2018, the Trump name was being theatrically chiseled off the hotel’s signage in a very public manner.
The hotel has since been rebranded the JW Marriott Panama.
As Jorge Eduardo Ritter arrived at the hotel for a Saturday morning meeting, the former foreign minister of Panama noted the irony of the location.
Like so many here, Ritter was primarily interested in figuring out what it was, exactly, Trump was angling for in his social media attacks.
“A lot of people just think that there are those remarks that have no fundamental truth in it, so they disregard it,” Ritter said. “I don’t like to disregard what President Trump says, because when he says something, he might not mean exactly what he is saying, but he is looking for something.”
Ritter didn’t want to entertain the possibility that Trump’s private business experience played a role in his current fixation on the Panama Canal. Trump, he noted, has a far longer history attacking the handover agreement.
But he did view Trump’s remarks as a clear, and potentially ominous, signal.
“This fixation with Panama — I sense that something is going to happen,” Ritter said. “I don’t think it’s going to be a military invasion or he will take over the canal, but something is going to happen.”
The irony of the current tension, several Panamanian current and former officials noted, is that despite Trump’s personal experiences and long-standing fixation on the canal’s handover, he paid little attention to the country in his first term.
Trump never nominated an ambassador to the country in his four years, relying instead on a holdover from the Obama administration and then career officials to fill the job on an acting basis.
Chinese ties with Panama also strengthened significantly during Trump’s first term in office. Panama severed its diplomatic ties with Taiwan in an overt shift to bolster ties with Beijing in 2017 and joined China’s Belt and Road initiative a year later.
Trump’s concerns about Beijing’s influence over the canal center on two ports, situated at either end of the canal, that are operated by CK Hutchison Holdings, a Hong Kong-based company that first secured those rights in 1997 — two decades before he entered the White House.
Ilya Espinosa de Marotta’s first thought when she saw Trump’s initial social media attacks on the Panama Canal’s operations was one of confusion.
“Why now?” the Panama Canal Authority’s deputy administrator recalled to CNN.
“Hong Kong has been here since ’97. We’ve been running the canal for 25 years. We’ve been very transparent — you can know this is run 100 percent by Panamanians, so why now? It puzzles me.”
Still, the Hong Kong-connected seaports have drawn scrutiny and national security concerns from US officials and were cited by Florida Republican Sen. Marco Rubio, Trump’s pick for secretary of state, during his confirmation hearing this week as evidence that the terms of the treaty agreements that require neutrality in the canal’s operations may have been violated.
Yet those concerns come at a moment where the Panamanian government’s posture appears sharply different than it was during Trump’s first term.
President Mulino made stemming the flow of migrants through the Darien Gap, the treacherous jungle stretch that links Colombia to Panama where hundreds of thousands of migrants have trekked in recent years, a top priority. Upon his inauguration last year, Mulino immediately took action on a deal with the Biden administration to deliver on that pledge.
Since Trump’s election, Mulino has made clear his desire to partner with the incoming Trump team on its long-standing top priority.
That Mulino was put in the position of having to fire back at Trump on social media and in a video statement defending the sovereignty of the Panama Canal has left Panamanian officials CNN spoke to, for lack of a better term, flummoxed.
Asked if there was any validity to Trump’s claim that US cargo ships and US Navy vessels were paying higher rates than those from other nations, Marotta, the canal’s deputy administrator, didn’t hesitate.
“No – that’s not – that’s not a true statement,” she said, quickly batting down the idea of cutting the rates for US vessels as a way of placating Trump. “It’s not a possible option,” Marotta told CNN. “Because of the treaties.”
The treaties signed by Torrijos and Carter in 1977 continue to dictate the operational rules, regulations and infrastructure followed by the Panama Canal Authority to this day. In this case, the treaties bind Panama to ensuring tolls and related charges for transit are “just, reasonable, equitable, and consistent with international law.”
Marotta was the engineer who led the Panama Canal Expansion Project, the $5.2 billion undertaking that opened in 2016 and dramatically expanded the canal’s operations and capacity to move far larger cargo ships through the waterway.
The US government’s role in that effort? “As far as financially? None,” Marotta said.
According to Quijano, the former canal administrator, not only are Trump’s allegations of exorbitant tolls on US ships not true, the question was never brought up during Trump’s first four years in office.
“I was the administrator in a period where I raised tolls as well, especially after the expansion was completed,” Quijano told CNN. “We raised the tolls and he was president during those years. I never heard from him any complaints about the canal or about anything.”
The canal’s original 1914 locks can handle ships carrying up to 5,000 containers. The expansion can handle ships carrying more than triple that amount — and the resulting revenue has transformed the financial standing of the canal.
The canal authority returned $2.4 billion to the Panamanian government in the last fiscal year.
There are major geopolitical, economic and climate issues the authority has grappled with over the last several years, and that have created acute problems Marotta and her colleagues are intensely focused on trying to navigate on a day-to-day basis.
The canal, after all, is not a public utility. It is a business — and an absolutely critical one for Panama’s economy and people, with a workforce of 8,500 and the source of potable water for 50 percent of the country’s population.
“To us, this is a revenue provider for the country,” Marotta, who started working at the canal in 1985 and witnessed the transformed approach after the handover. “So we look at the business model and not the government break-even model — that in itself is a big change.”
On a sweltering January day in the first weeks of Panama’s dry season, the political storm coursing around the canal seemed peripheral at best.
Tourists packed the grandstands just outside the operational perimeter of the Miraflores Locks. Kids wandered through a large outdoor playground. Inside the visitor center, the souvenir shops and concession stands were full, as the voice of Morgan Freeman greeted tourists ahead of the IMAX documentary the Oscar-winning actor narrates at the start of every tour.
Yet beneath the business-as-usual sheen of normalcy, signs of a nation’s struggle to reclaim its sovereignty aren’t hard to find.
Marotta spoke to CNN less than two weeks after Panama’s celebration of 25 years operating the canal, where Mulino said, “Rest assured, it will stay in our control forever.”
The Panama Canal Administration Building Marotta walks into for work each day was, until the 1999 handover, inside the US-operated Panama Canal Zone.
Just four days prior, Mulino had been couple of hundred yards away from where she spoke, laying a wreath at the eternal flame that marks the memorial to the Panamanians killed in 1964 protesting American control of the canal and the zone surrounding its operations.
Martyr’s Day is commemorated on January 9 each year — a visceral reminder of a nation’s experience that runs far deeper than its cornerstone engineering marvel.
“People focus on the canal, the canal, the canal,” Marotta says. “But what made the country of Panama – the people of Panama – wanting the canal to be transferred to Panama wasn’t just the canal. This was like a US territory inside a country. So there were barriers. There was US police, there were US schools. It was a completely other country within our country, and there were many military bases.”
Quijano grew animated talking about Trump’s threats to seize the canal by force.
“That’s not going to happen,” Quijano said. “I’ll be on the streets myself defending our sovereignty because the canal is over sovereign land.”
One canal employee casually noted that passengers on a cruise ship that came through the locks earlier in the week held up signs apologizing for Trump’s recent antagonism. He seemed to get a kick out of it.
Walking into the operations center in between the two passageways, another pointed out the critical functions a handful of personnel toward the back of the room were intensely focused on carrying out.
Then he paused.
“See? All Panamanian. No Chinese soldiers anywhere.”
