Donald Trump’s Panama gambit could rejig equations within Republican Party

If Donald Trump disrupts US relations with Panama with a canal takeover, India is at risk of losing much of its diplomatic investment there. The canal was the pivot of India’s Panama initiative

There is more than meets the eye to incoming United States President Donald Trump’s simplistic rationale that his country should take over the Panama Canal because of “ridiculous” overcharging of ships connecting the Atlantic and Pacific oceans.

For unsuspecting voters who elected Trump in November, it is a case of the US reflexively flexing its muscles in its backyard. They assume the 47th US president is threatening to take back the canal as part of his promise to Make America Great Again (MAGA) and discipline Chinese companies which manage the canal.

The Republican Party’s top echelons can only acknowledge at the party’s peril that behind Trump’s bullying of Panama is a grand scheme by their wily chief to leave an indelible imprint on the Grand Old Party (GOP) in his second and final White House tenure. Texas is the rock-solid base for the GOP and without the state’s 40 electoral votes, the party’s nominee for president would struggle to get past the victory line. Texas and Panama are conjoined at the hip, enjoying a shared prosperity. The port of Houston and the Panama Canal are integral to this apportioned wealth and welfare of residents on both sides.

Trump wants his lasting political legacy to be that his adopted home state of Florida —  he was a legal resident of New York earlier — is the most reliable large ‘Red’ state by the time he hands over the party’s nomination to a successor in 2028. Florida, with 30 votes is the third largest state in the electoral college, which chooses US presidents. Since World War II, Florida has been a swing state. Democrat Barack Obama carried Florida in both his poll cycles. Between 2016 and 2024, Trump won in Florida thrice.

In the next presidential election, Texas Senator Ted Cruz is likely to be a leading candidate in the Republican primaries if Vice President J D Vance lacks overwhelming party support. Trump’s insurance, in that case, is Florida Senator Marco Rubio, who has been nominated as the next US Secretary of State. Rubio’s is the most high-profile job in any US administration, even higher in profile than the Vice President. Several of Trump’s incoming Cabinet nominees are from Florida.

If Texas was an independent country, it would be in a ‘Special and Privileged Strategic Partnership’, with Panama, like India’s relationship with Russia. Thousands of Panamanian dual US citizens live in Houston, San Antonio, Austin, Dallas, and Fort Worth. Trump, who regularly rants against immigrants from Central and South America, knows that these dual citizens are honoured US Army veterans. When US Southern Command was based in Panama, it had 13 military bases there. Panamanians joined the US Army in droves and acquired US dual citizenship.

The US-Panama Business Council, which manages a strategic relationship of sorts between the two sides made a rare relocation from Washington to Houston. It would not be hyperbole to suggest that Texas and Panama need each other more than they need Washington. Houston is the number one US city in the ratio of exports to GDP, according to the latest USA Global Index. Most of these exports go through the Panama Canal.

If Trump is to succeed in his Florida mission, he must first diminish the robust Texas-Panama relationship, bring down Cruz by a few pegs and eliminate him from a presidential run. Cruz once called Trump a “pathological liar” and a “coward.” On December 21, Lara Trump, wife of Eric Trump, third son of the president-in-waiting, withdrew from contention for filling Rubio’s Senate seat. That may be a case one step backward, two steps forward later. She may well be Florida’s next Republican Governor when the incumbent, Ron DeSantis will be ineligible for a third term in 2026.

Houston’s prosperity and its future potential were key factors in Prime Minister Narendra Modi’s famous visit to the city in September 2019, when he shared the ‘Howdy Modi’ stage with Trump. It is not anywhere nearly as well known that India chose Panama as a destination for the first overseas visit by Venkaiah Naidu after he was elected Vice President. More than a century ago, Indian workers arrived in Panama, first to construct a railway and later the Panama Canal. Since Naidu’s visit, the Modi government has invested diplomatically in Panama. External Affairs Minister S Jaishankar followed in Naidu’s footsteps and — perhaps inadvertently — became a global ambassador for Panamanian coffee. “I arrived this morning on a super red eye flight and after a few cups of strong and excellent Panamanian coffee, set out,” Jaishankar said at his first public event in Panama City. He continued to praise their coffee throughout his visit.

If Trump disrupts US relations with Panama with a canal takeover, India is at risk of losing much of its investment there. The canal was the pivot of India’s Panama initiative.

(K P Nayar has extensively covered West Asia and reported from Washington as a foreign correspondent for 15 years.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.