Donald Trump is in the spotlight again, this time sparking a heated debate with Panama over fees for using the Panama Canal. At the same time, his businesses are caught up in a tax-related legal mess in the Central American country. Here’s what’s going on.
Back in June 2019, a private equity manager named Orestes Fintiklis and his company, Ithaca Capital Partners, accused two Trump businesses—Trump Panama Hotel Management LLC and Trump International Hotels Management LLC—of not paying taxes on money earned from managing a hotel in Panama City. The hotel once carried the Trump name and was managed by his companies.
According to court filings in New York, the Trump businesses allegedly didn’t pay the 12.5% tax they owed on the millions they earned. They’re also accused of not accurately reporting employee salaries, which meant skipping out on social security payments to Panama’s government. After a tax audit revealed these irregularities, Fintiklis claimed his company was forced to cover Trump’s unpaid dues.
In March 2020, Fintiklis filed an updated complaint, stating that if Trump’s businesses had been upfront about their tax issues, he wouldn’t have entered into the deal in the first place. He pointed out that Trump’s actions led to massive financial penalties for his company and painted a picture of mismanagement behind the scenes.
Fast forward to now, Trump is pushing back on Panama, accusing the country of overcharging American ships to use the Panama Canal—a vital waterway connecting the Atlantic and Pacific Oceans. On Sunday, Trump went on his social media platform, Truth Social, calling the fees “ridiculous” and even hinting at demanding the canal back if Panama doesn’t reduce the costs.
“The United States has always had an interest in the Panama Canal being secure and running efficiently,” Trump wrote. “We’d never let it fall into the wrong hands. It wasn’t handed over for others’ benefit—it was a gesture of cooperation between us and Panama.”
Panama’s President, José Raúl Mulino, quickly clapped back in a video posted on social media, saying, “Every square meter of the Panama Canal belongs to Panama and will always belong to Panama.”
Trump wasn’t backing down, replying with a defiant “We’ll see about that.”
Political commentators have started connecting the dots between Trump’s fiery remarks about the canal and his ongoing legal troubles in Panama. Ana Navarro Flores, a well-known strategist, speculated on social media that Trump’s threats might be tied to the unresolved tax issues. However, there’s no concrete evidence linking the two situations, and Trump’s team hasn’t addressed any connections publicly.
As things stand, Trump’s threats don’t seem to hold much water under international law. The U.S. handed control of the Panama Canal to Panama in 1999 under a treaty signed during President Jimmy Carter’s administration—an agreement Trump has criticized as a bad deal. Still, with his inauguration as U.S. President just around the corner, Trump’s tough talk is making waves.
Panama, for its part, has made it clear it won’t budge, promising to defend its territory if needed. How this standoff will end depends on whether cooler heads prevail in the realm of diplomacy. For now, it’s a waiting game to see what comes next in this escalating drama.
