Can Trump bully Panama into giving back its canal?

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Cyclone Trump has well and truly hit the Middle East.

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If I can use the word bollocks on air, I'd use it.

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It is fascinating.

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Right now there is a massive operation underway at Miami International Airport.

It happens there at this time every year.

This season we transfer around 460 million flowers from Ecuador and Colombia.

Mostly our hot roses.

In Miami, the roses are inspected and then transported across the United States, ready to be sold for Valentine's Day.

So 300 million roses from those countries to Valentine's.

So those are huge numbers.

Almost one flower per each American living here.

And yet last week there were fears that this operation could fall apart.

Donald Trump threatened a 25% tariff on Colombian goods.

And that was just for a start.

The tariff will be up at 50% by Valentine's Day.

So why the sudden snap tariffs?

President Trump had started putting his main campaign promise into action, cracking down on undocumented migrants in America.

Within days of taking office, he'd sent planes full of handcuffed Colombians to Bogota.

But...

Colombia turned back two U.S.

military planes carrying deportees, saying the United States cannot treat Colombian migrants like criminals.

The standoff was tense but brief.

Colombia's president caved in, saving the Valentine's Day rose supply.

The damage a trade war with America would do to Colombia's economy wasn't worth the trouble, but President Pedro wasn't happy about it at all.

He said that America would need to have a discussion about whether by deporting these people they're making the same mistake Germans made in 1943.

Pretty explicit reference to the Holocaust there.

But while the Colombian president tries to claim the high ground, it's pretty clear who won this 14-hour trade war.

How do you see our relationship with Latin America and Brazil?

Great.

Should be great.

And that has serious ramifications for the rest of Latin America.

They need us much more than we need them.

We don't need them.

They need us.

Everybody needs us.

Everybody needs us.

Trump plans to dangle that fact over the heads of Latin American leaders as he demands that they accept millions of undocumented migrants into their countries.

He'll do it as he negotiates deals with them and he will use it as leverage in his new favorite debate.

China is operating the Panama Canal and we didn't give it to China, we gave it to Panama and we're taking it back.

If Panama and its regional neighbours all act like Colombia, Trump will probably get that canal, the deportations, and more.

Today, can Latin America, one of the most divided, violent, and vulnerable parts of the world, find a way to fight back against Donald Trump?

I'm Matt Bevan, and this is If You're Listening.

This story involves drugs, cartels, corruption, mass migration, and violence, and we're going to get to all of that.

But we're going to start with the Panama Canal.

If you traveled back in time to the start of the 20th century and visited the Panama Canal you'd probably get quite a shock.

For one thing Panama didn't exist.

It was part of Colombia.

For another thing there was no canal just a railroad linking the Pacific Ocean on one side with the Atlantic Ocean on the other.

On the 3rd of November 1903, two Colombian ships arrived at the Atlantic Ocean end of that railroad.

There were 500 soldiers on board and they were going to take that train to Panama City where a revolution was underway.

The people of Panama wanted to secede from Colombia and become their own country.

So these Colombian soldiers were going to join the fight to stop that from happening.

But when they got to the port they were

disappointed to find that the American warship USS Nashville was already there, cannons locked and loaded.

Its job was to make sure the 500 Colombian soldiers couldn't get on the train and quash the revolution.

The plan worked tremendously.

The Colombian soldiers never made it to Panama City.

The Panamanian Revolution was completed with only one casualty.

But the USS Nashville wasn't just there for fun.

It was there as part of a quid pro quo.

In exchange for supporting the revolution, the new Republic of Panama would grant the United States government control of land around the Panama Railroad.

The land was very valuable.

I mean, I showed my seven-year-old a map of the Americas and asked where she would build a canal to go from the Atlantic to the Pacific, and she got it straight away.

The French had done basically the same thing, pointed at a map and sent guys to go and dig a canal.

And the French, who under De Lesseps, builder of the Suez Canal, first started work back in 1882.

They were disappointed to find mountains and tropical diseases and lots of things that seemed specifically designed to ruin an engineer's afternoon.

But U.S.

President Theodore Roosevelt was confident that he could get the job done.

Six million pounds of explosives a year were used in the cutting of this gigantic ditch during its nine-mile length.

That would make a real Chinese New Year's party, wouldn't it?

Yes, I suppose it would.

In 1914, the canal was completed, 26 meters above sea level, with massive lock gates that lift ships up and down at each end.

15,000 workers are employed on the lock system that lifts vessels through the 40 miles from the Atlantic to the Pacific.

It was a massive win for the United States.

The Panama Canal cut the time it took for ships to travel from New York to Los Angeles by 60%

and gave the U.S.

Navy a vital shortcut between the Atlantic and the Pacific.

The cost?

Well, it's difficult to get actual figures, but the entire canal had an estimated cost of some 375 million dollars.

But it could have been a whole lot more expensive.

See, Colombia was going to make America pay way more for the lease on the land that the canal would be built on, and we couldn't have that, could we?

Much better to split Colombia in half and get a sweet deal with the new nation of Panama.

Score.

And this move from America, supporting a breakaway state in Panama to get what they wanted, it formed a kind of blueprint for how they would deal with much of Central America.

Roosevelt called it big stick diplomacy.

Use force or the threat of force to get Latin American countries to act in America's interests.

It basically involves having big scary battleships and making it clear to people that you are willing to use them if they don't do what you want.

One of his famous quotes was, speak softly and carry a big stick.

And we kind of pride ourselves in being a big stick, an intimidator if need be, and a deliverer of a message, a direct message if it comes to that.

And using a big stick is a lot easier when the thing that you're hitting is quite small.

Today, the people of Panama are dissatisfied with the agreement that gave America perpetual sovereignty in the canal zone.

Riots and demonstrations have increasingly disrupted life here in Panama City.

For more than 70 years, the people of Panama tried to get the Americans to give the canal to them and leave.

The big stick was occasionally used to preserve the status quo.

Eventually, in the late 1970s, US President Jimmy Carter signed an agreement with Panama to give them control of the canal by the end of the century.

The agreement was as much about anti-imperialist goodwill as it was about preventing the Soviet Union from building a canal of its own nearby.

The US really didn't want the communists operating in what they saw as their backyard.

And they really do see it as their backyard.

In Central America, the US has often acted like it had the right to do whatever it wanted.

Throughout the 20th century, it used its big stick to threaten, invade, or orchestrate coups in Cuba, the Dominican Republic, Guatemala, Haiti, Nicaragua, Panama, and Venezuela.

The result of all of that is a group of small, poor, divided countries around the rim of the Caribbean, almost all of them dependent on the US for trade and security and unable to really push back against anything that America wants.

At least they have control of the canal, though.

Well, my interest in Panama really began when we had the Ms.

Universe contest in Panama, which I own.

I own the Miss Universe, and it was one of the most successful contests we've ever had.

This is Donald Trump in 2009 talking about an exciting new real estate project he was licensing his name to.

We're now doing a great, great project in Panama that's selling like hotcakes and I think it's one of the most beautiful buildings in the world.

The building was a few kilometers away from the Pacific opening of the Panama Canal.

Architecturally it looks like a gorgeous sale.

Some people say it resembles a giant D as well.

What?

What was that, Ivanka?

Is a giant D like a big stick?

Well traditionally Trump doesn't like to do things that are small on scale.

While construction on the hotel hotel was underway, Trump decided to weigh in on the Panama Canal issue.

Jimmy Carter gave the Panama Canal away for nothing, zero.

In other words, they said we want the canal.

He said, oh, okay.

Trump brought up the canal in virtually every promotional interview he did about the hotel.

To him, it was a prime example of foreign countries taking advantage of bad American dealmakers.

Jimmy Carter gave it away for $1.

Do you think he was a great negotiator?

This is what we have.

we have very stupid people running the united states but panamanians took this personally the panama city government passed a motion to declare donald trump unwelcome in their city and trump was forced to do a round of interviews with panamanian media outlets to clear things up i think the u.s a poor a bad deal for the united states i think it was a great deal for panama and if i were for panama i'd try and make the same kind of a deal i respect that his apology seems to have been accepted and he was allowed to visit Panama City to open the tower a few months later.

At the event, he met the right-wing populist president of Panama, Riccardo Martinelli.

And he came over and he met the president and his two incredible sons.

And they really love you, President.

And I want to just thank you very much for being here today and being my friend.

As a businessman and during his first term as president, Donald Trump built relationships with several right-wing leaders of countries surrounding the Caribbean Sea.

And yet after his inauguration last month, he only had one that he could call.

El Salvador President Naib Bukele calls himself the world's coolest dictator.

He's built one of the world's biggest maximum security prisons and has made Bitcoin an official currency of his country.

He needs the prison because of the massive crackdown on organized crime he's been undertaking, and he needs the Bitcoin because it definitely never gets used to support organized crime.

Oh, hang.

Oh, hang on.

Overseas cryptocurrency payments may have been made to organized crime groups for some attacks.

Never mind.

On the phone call, Trump promised to support Michele's tough on crime stance, and the two signed a tentative agreement that would allow the U.S.

to deport unwanted immigrants to El Salvador.

It sounds like a great phone call, but it was the only one that Donald Trump made to a Central American leader.

Since Trump was last in office, a pink tide has washed across the region, bringing left-wing governments to power in Honduras, Guatemala, Colombia, Brazil, and Mexico, joining incumbent left-wing governments in Nicaragua, Venezuela, Cuba, and the Dominican Republic.

Many of these left-wing governments were elected on promises to stand up to the United States.

And yet, there is always the big stick.

And now that all these countries' economies are so heavily intertwined with America, the big stick doesn't need to be a battleship.

The big stick can just be a threat of big tariffs and sanctions if you don't take your deported citizens back.

You probably read about Colombia two days ago.

They said, no, we're not taking them.

They said, we're going to take them.

You're going to take them.

You're going to like it too.

This episode with Colombia, understandably, freaked out a lot of the governments in range of the big stick.

They're particularly spooked because Trump also announced in his inauguration address that he was going to undo stupid Jimmy Carter's deal with Panama.

Panama's promise to us has been broken.

The purpose of our deal and the spirit of our treaty has been totally violated.

American ships are being severely overcharged and not treated fairly in any way, shape, or form, and that includes the United States Navy.

Last year it was more expensive than usual to get through the Panama Canal.

A drought had brought down the canal's water level and the Panamanian operators had to decrease the number of ships going through.

When demand for canal passage is high, Panama implements an auction system giving transit slots to the highest bidder.

In 2024, the cost of a slot went up to $4 million.

And the culprit?

Climate change and free market capitalism, baby.

But Trump says something else is to blame.

Well, China is operating the Panama Canal and we didn't give it to China.

We gave it to Panama and we're taking it back.

While Chinese companies do invest in Panama, there is no evidence at all that China has any influence over the canal itself.

And as for taking it back, the current Panamanian president says that is not happening.

The Panama Canal belongs to Panama and will continue to belong to Panama, he says.

He also says that Panama is working to decrease its cooperation with Beijing.

Last weekend, though, Trump sent his Secretary of State, Marco Rubio, or as Trump used to call him, Little Marco, to go down to Panama and wave the big stick around.

Marco just got back, as you know, and he had a very long conversation with the leader of Panama.

Rubio warned Panama that the Trump administration may be forced to take action to protect the neutrality of the

So, the question is: do big countries always beat small ones when they get the stick out?

Well,

not quite.

Small countries around the world have found various inventive ways to stand up to bigger ones.

North Korea, for example, has gone with step one, be insane, step two, get a weird haircut, step three, have nuclear weapons.

But that's not for everyone.

A more common game plan is teaming up with other nearby like-minded countries to form a larger, more powerful political entity, like the European Union or ASEAN.

Central America has tried to do that too with the Parlamento Centroamericano or Parliament.

But um,

well, look at it.

I realize that you can't see this in the podcast version, but what the video version people are seeing is like it...

it looks like the regional headquarters of a struggling stationery supply company.

It's a three-story blue concrete building and business park in Guatemala City, and it's not a nice concrete building.

If it was a hotel, you wouldn't want to stay there.

It doesn't even have a car park.

They've reserved street parking around the building for the MPs by painting Parliament on the road in bright yellow.

The politicians inside represent 55 million people in Guatemala, El Salvador, Honduras, Nicaragua, Panama and the Dominican Republic.

But pretty much everybody hates Parliament.

Not just the building, the entire organization.

Parliament members have legal immunity from prosecution and it's given the body a bit of a reputation.

Former Panama President Ricardo Martinelli, the guy who came to the opening of Trump's hotel in Panama City, promised to pull his country out of Parliament, calling it a den of thieves.

And then he proved his own statement true after allegations of corruption were made against him and the two sons Trump was so impressed by.

The president and his two incredible sons.

Yeah, he got himself and his two incredible sons appointed as members of Parliament to avoid prosecution.

This has happened several times.

Multiple former presidents of Honduras, Nicaragua, Panama and Guatemala have used Parliament membership as a safe haven from prison.

The simple answer to why these countries are going to struggle to stand up to Donald Trump is that many of them are, from a governance perspective, a mess.

Corruption, violence, spectacular inequality, ineffective institutions, all mean that coordinating a multilateral response to an American president waving his big stick or giant D around is almost impossible.

Particularly a president who, as we talked about last week, doesn't really care about the domestic economic effects of whacking massive tariffs on America's most important trading partners.

But here's the thing: if Trump starts Roosevelting all over the place and the Central American countries can't fight back, this might end up happening after all.

China is operating the Panama Canal.

When someone comes at you with a big stick and you're too dysfunctional to make your own, your best bet might be to find someone with a bigger stick.

So on Wednesday, just as we finished making this episode, Donald Trump obviously came out with something quite big.

The U.S.

will take over the Gaza Strip and we will do a job with it too.

We'll own it.

Right.

So he's not even done with the canal seizure, but he's moving on to the Gaza Strip.

So we'll be doing something on that next week.

I'm figuring out exactly what it is we will do, but it will be something.

Unless of course he orders the annexation of New Zealand or bombs the moon or something like that.

I mean, who knows?

If you're listening, is written by me, Matt Bevan.

Supervising producer is Jess O'Callaghan.

Audio production this week is by Hamish Camilleri.

Tickets are selling fast to our big live show in Adelaide, by the way.

There is a link to where you can pick up some of your own in the show notes.

I'll see you next week.

Hi, I'm Fran and I'm PK, and the party room is back for 2025.

Bigger and better than ever, PK.

It's going to be a huge year in politics, but Fran and I are here to tell you what you need to know.

And every week, we'll be joined by a guest to analyze all of the big political news from inside and outside the Canberra bubble.

It's called The Party Room.

You can find it on the ABC Listen app.

See you, PK.

See you, Fran.