Panama's leader clapping back at Donald Trump over the weekend the US president elect called on the Central American country the panar canal has long been a key trade route connecting the Atlantic and Pacific Oceans and moving trillions in cargo but recently it's been facing some serious challenges Elon Musk has even expressed concern over what's going on with it once controlled by the US it was handed over to Panama in 1999 since then Rising fees and tension including a trump threat have made shipping companies unhappy so what's really happening here let's dive into it Donald Trump's
desperate threat on December 22nd Donald Trump gave a sneak peek of what's in store when he steps into the White House and honestly it left a lot of people talking at a rally in Arizona he didn't hold back on the Panama Canal calling out Panama for what he sees as crazy high fees charged to American ships passing through to say his comments shocked some people would be understatement Trump's big issue he argued that these skyrocketing fees are making it harder for American businesses to ship goods between the Atlantic and Pacific Oceans hurting the economy in
the process in his view this could be a big reason why the US economy hasn't been doing as well in recent years his solution if Panama doesn't lower the costs soon the US might just take the canal back yep you heard that right Trump suggested that if the situation doesn't change the United States could demand control of the Panama Canal again he even warned Panama officials to be guided accordingly why is this such a big deal for starters the Panama Canal is crucial for international trade it's one of the busiest shipping routes in the world
so if the fees keep climbing it could have massive effects on global Commerce Trump also pointed out that countries like China might be benefiting from these high costs while the US is getting stuck with the bill the Canal's strategic location gives China a chance to move Goods efficiently which could put American businesses at a disadvantage the president of Panama Jose rul Molino didn't waste any time responding he made it clear that Panama has full control over the canal and he wasn't going to let Trump or anyone else tell him otherwise he also stressed that the
canal was never going to be handed back to the US and frankly he wasn't interested in negotiating with Trump about it either as you can imagine this sparked quite the back and forth but Elon Musk the tech Mogul and now a key figure overseeing US government spending weighed in with his take on why the prices are so high sources close to him say that Elon believes Panama's price hikes are a result of several ongoing issues they've been facing things like a lack of fresh water political tensions security concerns and other challenges have all piled up
over time and it's been costly for Panama to keep things running smoothly Elon suggested that Panama might be over charging American shipping companies in an effort to make up for these Financial issues in other words it's less about some Global conspiracy and more about Panama's own Financial struggles but while elon's take makes sense from a business perspective it didn't exactly calm the situation down many people especially Trump's supporters just saw his comments as another example of him being well Trump but for others this was more than just a few harsh words it felt like a
direct threat to another country's sovereignty and it wasn't just Americans who were upset the response from Panama was pretty Fierce president Molino didn't hold back expressing serious distaste for Trump's remarks this reaction took many by surprise hinting at a deeper issue at play here it turns out there's a long complicated history between Panama and the US that goes Way Beyond just the past few decades it stretches back over 500 years starting with the discovery of the narrow strip of land that would later become the Panama Canal to really understand the weight of what's happening now
you have to go all the way back to 1513 that's the year when Vasco Nunes de Balboa a Spanish explorer first crossed the istmas of Panama and realized that the land was connecting the Atlantic and Pacific Oceans an Explorer's dream back in October of 1513 Spanish explorer Vasco Nunes de Balboa made an incredible Discovery while crossing the ismos of Panama he found a narrow strip of land that separated the Atlantic and Pacific Oceans and immediately saw the potential for creating a passage between the two he told other explorers about his find imagining that with the
right resources he could build a Waterway connecting both oceans this idea sparked excitement among other explorers since it could save a ton of time for ships traveling between Europe and Asia why well back then the southern tip of South America was a nightmare to navigate the Seas were rough and any ship that attempted the journey rarely made it back those that did return shared horror stories about violent storms treacherous Waters and encounters with what they believed were sea monsters yeah it was a pretty brutal Journey so it made perfect sense to explore the idea of
a shortcut many explorers jumped on board with the concept but even though the idea was enticing real progress didn't happen right away the main issue the technology just wasn't there the tools needed to create a canal weren't advanced enough to tackle the job and on top of that the land they had to dig through was incredibly tough thick jungles towering mountains and a brutal tropical climate made things even harder most of the explorers who tried to work there weren't used to living in such harsh conditions and it quickly became clear that building the canal wouldn't
be as easy as it seemed for centuries the dream of a canal lay dormant it wasn't until the late 19th century over 300 years after vasco's death death that anyone truly tried to make it happen in 1881 a group of French explorers decided to take on the challenge by this time technology had Advanced enough to make the task seem possible the French had recently completed the Suez Canal in Egypt a huge engineering success and now they set their sights on Panama thinking they could build a similar sea level Canal there they had the right equipment
and knowhow but they still had to contend with the same rough terrain that had styed earlier Explorer the Panama Canal project was taken over by a French engineer named Ferdinand deeps who had just pulled off a massive win with the SE canal in Egypt given his success there everyone assumed that building a canal in Panama would be a breeze but as it turned out they couldn't have been more wrong right from the start things went South almost immediately workers started falling ill with malaria and yellow fever the tropical environment was brutal and the diseases spread
quickly within just a few weeks workers were dying in large numbers and it became clear that Ferdinand and his team hadn't thought through what they were getting into the first major hurdle the climate Panama's tropical weather meant heavy rain landslides and an abundance of mosquitoes these mosquitoes were the real troublemakers as They Carried the deadly diseases that wiped out so many workers unlike the dry manageable desert conditions of Egypt Panama's dense jungle was tough to navigate the landscape was was full of uneven slopes and thick vegetation making it way more difficult to dig through than
the flat desert terrain they dealt with in Egypt then there were the costs all these issues disease the rough terrain the equipment needed to deal with it made everything much more expensive than anticipated the project became a financial black hole expenses kept Rising but progress was slow and to make matters worse there was a lot of corruption among the higher ups which only added to the growing by 1889 barely 8 years into the project things had completely Fallen apart Ferdinand had lost over 20,000 workers to disease and the money spent was gone for good the
whole thing was a disaster and with no real progress being made most of the teams working on the canal pulled out by the end of December 1889 the project was officially abandoned it was a huge failure by every measure but less than 20 years later the US stepped in to try again this time it was led by John Stevens a well-known civil engineer who had a reputation for getting things done the question was would Stevens succeed where so many others had failed or would he just be another name in the long list of those who
tried and fell short building The Canal at the dawn of the 20th century US president Theodore Roosevelt got seriously interested in completing the Panama Canal he saw huge potential in having a shortcut between the Atlantic and Pacific Oceans not just for trade but for military strategy as well the canal could give the us a faster route for transporting goods and troops making it a powerful asset for both Commercial and Military purposes there was just one big problem it wasn't the US is territory while building the canal was one thing actually having control over it was
another for Roosevelt's Vision to work the US needed legal rights over the Canal Zone something the previous countries trying to build it hadn't been able to secure the idea of the US owning it or at least having some special rights was key to making it truly beneficial around the same time Panama was in the middle of a battle for independence from Colombia the US saw this as an opportunity to get involved Panama's fight for independence wasn't going well and Roosevelt figured supporting them could be a win-win so in 1903 the US backed Panama's Independence Movement
offering political and financial support thanks to this backing Panama agreed to sign a treaty that would Grant the US control over the Canal Zone effectively giving them the green light to build and manage the canal in exchange for some financial aid the treaty was signed in 1903 and just a year later in 1904 construction began but this time it wasn't the French who were in charge it was the United States and they brought in John Stevens an American Civil Engineer with a solid reputation for getting things done Stevens was known for being a smart No
Nonsense manager and he had a knack for handling huge projects under a lot of pressure he was exactly the kind of person needed to push the project forward after Decades of failure John Stevens the new man in charge of the Panama Canal project learned from the mistakes of the past especially the ones made by Ferdinand de leps and his French team instead of diving straight into the physical labor of digging Stevens took a smarter approach he focused on taking care of his work first understanding that keeping them healthy was essential to making the project succeed
he ensured they had decent housing good sanitation and most importantly access to Medical Care malaria and yellow fever had decimated the French Workforce so Stevens wasn't taking any chances he brought in top medical professionals from the US military to manage the health risks and keep the diseases under control but Stevens wasn't just focused on the workers well-being he also realized that digging a sea level Canal like the French had tried to do would be a Monumental task in such difficult terrain the land was full of steep slopes and deep valleys and leveling it all out
would be incredibly expensive and timec consuming so Stevens and his team of Engineers made a big decision instead of going for a sea level Canal they would build a lock-based system the idea was to lift ships up to a higher elevation at one point of the canal then lower them back down at another bypassing the need to dig through steep hills this lock system would make it easier to work with the land's natural features reduce costs and streamline the process it wasn't going to be easy but it was definitely a more practical solution than what
had been attempted before by 1906 they had made Solid progress but there was still a mountain of work left to do however their troubles were just beginning tensions between Steve and the US government began to escalate especially with President Theodore Roosevelt at first the administration had been fully supportive providing the resources and backing the project needed to get started but by the end of the year it seemed like the government's support was turning into interference some reports suggest that Roosevelt was pressuring Stevens to hire a contractor he didn't trust While others claim the president wasn't
on board with some of Steven's recent decisions about how the project should be run whatever the reasons it was clear that the relationship between Stevens and the government was beginning to sour then came the breaking point Stevens already dealing with the immense pressure of the project and the constant strain of working in such harsh conditions fell ill from stress it was the perfect excuse for the US government to replace him but before they could formally push him out Stevens beat them to the punch in 1907 he publicly resigned stepping down as chief engineer and handing
over the Reign to a man named George Washington gothal progress under goles when George Washington goal took over the Panama Canal project many expected him to bring some fresh ideas and lead the charge in a totally new Direction but in reality he mostly just picked up where John Stevens left off goal and his team used the same methods Stevens had put in place including steam shovels and dynamite to excavate the infamous calbra cut one of the toughest sections of the canal it wasn't an easy task by any means the land was treacherous and new excavation
methods were necessary to make any real progress but even with all the latest technology they still faced constant setbacks with equipment failures and the sheer difficulty of moving that much Earth despite all the measures Stevens and goals took to prevent disease such as bringing in top-notch Medical Teams to fight yellow fever things weren't looking great on the health front nearly 5,000 workers died from yellow fever and malaria during the project the work was grueling and conditions were far from ideal on top of the disease landslides and bad weather constantly set them back workers would spend
weeks carving out a section of the canal only for a minor rainfall to fill it up with mud undoing all their progress it was demoralizing but goals and his crew didn't back down they kept pushing forward determined to make that 500-year-old dream of a canal connecting the Atlantic and Pacific a reality finally after a decade of struggles setbacks and unimaginable challenges the Panama Canal was completed on August 15th 1914 the SS Anon a US cargo ship became the first vessel to officially pass through the canal this moment was a huge deal not just for the
us but also for Panama the canal was going to change everything before the canal moving between the Atlantic and Pacific took about 2 months an absolute nightmare for trade and military operations but with the canal now in place it only took about 8 hours to travel between the two oceans that was a massive difference and it gave the US a huge advantage in both Commerce and Military strategy what made this even more impressive was the diversity of the workforce workers came from all over the world including experienced laborers from the Caribbean all of them coming
together to make the canal happen it wasn't just an American achievement it was a global effort from the moment the Panama Canal opened it was under Us control the US didn't just have authority over the canal itself they owned the entire area surrounding it which gave them a major strategic Advantage president Theodore Roosevelt had seen the canal as a vital piece of military infrastructure especially as Global tensions started to rise and World War I loomed on the horizon the US military was quick to recognize the Canal's importance and they used it as a vital shipping
route to transport supplies for the war effort even after the war ended the US held onto control of the Canal Zone the canal was vital not just for military purposes but for trade as well over the years the US continued to invest in its infrastructure making improvements to accommodate even larger ships including the massive seawise giant which never actually passed through despite that countries from all over the world were Keen to use the canal as it made shipping between the Atlantic and Pacific much faster and more efficient because of the Canal's strategic location and high
traffic Panama benefited significantly from the US presence they were receiving generous compensation from the United States for allowing them to control the area for decades the US held sovereignty over the canal and its surrounding region but things were about to change in the 1960s and 1970s Panama began to push back against us control and everything changed when Omar torios became the president Omar wasn't your typical politician he loved his country deeply and he was ready to fight for Panama's sovereignty no matter what it took he believed Panama should have full control over its land and
that meant ending the heau verilla treaty which had granted the US ownership of the Canal Zone in exchange for financial compensation Omar Toros wasn't about to let Panama remain under the shadow of Us control forever he and his people were determined to gain complete sovereignty over every inch of their land including the Panama Canal a massive symbol of American influence Toros knew that the canal was vital to Panama's future both economically and politically and he wasn't going to settle for anything less than full control starting in the late 60s and into the early ' 70s
Omar Toros began some pretty intense negotiations with the US president Richard Nixon to say the talks were tense would be an understatement both sides had strong feelings about the canal and its strategic importance but after years of back and forth they finally reached an agreement in 1977 this was when The Cho Carter treaties were signed which granted Panama more legal rights over the canal the US still had a significant presence and influence but it was a step in the right direction for Panama over the next two decades Panama's control over the canal contined to grow
they gained more and more rights with the ultimate goal of full ownership every year Panama's position became stronger and the US presence slowly diminished finally on December 31st 199 99 Panama officially gained full control and ownership of the canal marking the end of an era the canal was now panamas to manage and it was a massive win for the country but even though the Handover was a huge milestone tensions were far from Over overcharging the US once Panama gained full control of the canal in 1999 they didn't waste any time making some major changes the
first thing they did was raise the fees that shipping companies had to pay to use the canal and this wasn't just a small bump it was a big one the tolls almost doubled which definitely made waves in the shipping industry especially among American companies like MK line and Costco shipping these companies weren't just any players they were huge contributors to the US economy moving tons of cargo between oceans the Panamanian government argued that the hike was necessary to fund maintenance and improvements to the canal they pointed out that the infrastructure needed to be upgraded to
handle bigger ships in the future which would in turn benefit everyone but of course the shipping companies weren't thrilled about this they grumbled about the higher fees but at the end of the day they had no choice but to pay up over time the shipping companies got used to the higher fees though they definitely didn't like it but the story didn't end there as the years went on the tolls kept Rising by the mid 2010 the situation was getting out of hand the shipping companies were not happy and some even started holding private meetings with
the Panama Canal authority to figure out ways to make the tolls more affordable it was clear that something needed to change but the Panamanian government wasn't backing down then came 2016 when the Panama Canal Authority hit everyone with another massive price increase this time it was too much for many companies to swallow and the backlash was even louder us shipping companies were especially vocal criticizing the increases and calling for some kind of solution the tolls were climbing faster than anyone had expected and with no signs of slowing down it felt like the Canal's growing costs
were becoming a serious issue for American businesses so when the Panama Canal Authority was asked why they kept raising the tolls their answer was pretty straightforward they needed the extra cash to fund the ongoing Expansion Project they'd promised that the canal would be upgraded and by the end of 2016 the project was finally completed the canal was bigger better and ready to handle even more traffic especially with the new set of locks designed for larger ships but as expected the tolls didn't go back to what they were before the project started in fact the price
hikes just kept on coming by early 2020 the toll increases weren't slowing down down in 2023 for instance any ship under 65 ft had to pay over 10% more just to pass through and it didn't stop there by 2025 the fees were expected to Jump by almost 30% shipping companies had no choice but to accept the new rates though they weren't happy about it a lot of people started to realize that under Us control tolls had mostly stayed the same for nearly four decades it wasn't until Panama took full control that prices started to climb
particularly after the 70s this shift in pricing didn't sit well with many and it eventually led to some pretty heated discussions one of the biggest moments being When Donald Trump decided to speak out about it Trump versus Panama When Donald Trump spoke out about Panama he didn't hold back he accused the Panamanian government of overcharging shipping companies using the canal and went as far as threatening to take control of of the Waterway if they didn't stop he even suggested that Panama was playing favorites with China implying that the Chinese government might be influencing Panama's decisions
regarding the canal it wasn't just about the tolls anymore it seemed like Trump was getting at something bigger the Panamanian government wasn't too pleased with Trump's comments president Jose rul Molino Came Out Swinging defending Panama's sovereignty over the canal he made it clear that Panama had full control and there was absolutely no outside influence especially not from China as far as Molino was concerned the matter was settled and there were no plans to renegotiate with the us about the canal the country wasn't about to give up its rights to the Waterway or let anyone push
them around Molino didn't just stop there he also addressed Trump's complaints about the rising toll fees he explained that the price increases weren't arbitrary they were carefully calculated by experts who took into count the cost of operations maintenance and market conditions the fees were necessary to keep the canal running smoothly ensuring that it would continue to be a sustainable resource for both Panama and the shipping companies it was pretty predictable that Elon Musk would have something to say about all this drama with the Panama Canal as the head of the Department of government efficiency it's
his job to dig into issues like these and make sure everything is running as smoothly and efficiently as possible so after taking a deep dive into the situation from both sides Elon didn't hold back according to him things have been a bit of a mess for the Panama Canal in recent years compared to how things were back in the 60s the Canal's been dealing with some serious environmental issues like water shortages and droughts this has made it harder for big ships to get through and things only got worse in 2019 that's when the dry season
lasted much longer than expected with almost no rain with the climate looking like it's only going to get more unpredictable the Panama Canal Authority had to find new ways to keep things running but these adjustments while necessary made everything slower which in turn made the canal harder and more expensive to maintain the longer ships took to pass through the more stress it put on the locks which were already starting to wear out faster but it wasn't just the weather causing problems the pandemic in 2020 threw a huge wrench into things too with countries closing borders
and factories shutting down goods were stuck in limbo meaning way less Revenue was flowing into the canal even now the canal is still feeling the effects of that slowdown to make up for the Lost Revenue they've had to increase tolls and it looks like they'll keep going up for the foreseeable future the problem with this Elon pointed out is that the Canal's infrastructure is getting old over half of it is more than 100 years old sure they've made some upgrades and expansions since 2016 but they're just putting a Band-Aid on the bigger issues the canal
is still running on infrastructure that wasn't built to handle modern traffic and the situation isn't getting any better to really future prooof the canal they'd need some serious upgrades but that would cost a fortune and if they decide to fund those upgrades by jacking up tolls even more shipping companies are going to bail already the price hikes have been getting complaints from companies including American giants like MK line and Costco shipping elon's worried that if the canal keeps raising fees fewer and fewer companies will be willing to pay and even if they had the money
to fix everything the process would take years just like it did when the canal was originally built it took about a decade back then and even with today's technology it had still take a long time what do you think leave your thoughts in the comments below and if you like this video don't forget to subscribe to our Channel see you in the next one
