Trump’s Plan for the Panama Canal, With Will Freeman

LINDSAY:
Welcome to The President's Inbox. I'm Jim Lindsay, the Mary and David Boies Distinguished Senior Fellow in U.S. Foreign Policy at the Council on Foreign Relations. This week's topic is Trump's plan for the Panama Canal. With me to discuss the Trump administration's policy toward Panama and the Panama Canal is Will Freeman. Will is a fellow for Latin America studies at the council. His work focuses on the rule of law, on corruption, organized crime in Latin America, and on U.S.-Latin America relations.
His writings have appeared in Foreign Affairs, the New York Times, in the Washington Post, among other outlets. He writes a monthly column for America's Quarterly, where his most recent piece is titled, Securing the Panama Canal Requires Diplomacy. Will, thank you very much for coming back on the President's Inbox.

FREEMAN:
Thanks for having me.

LINDSAY:
Trump raised eyebrows late last year, Will, when he began talking about the United States taking back the Panama Canal, a point he reiterated in his inaugural address in January. We'll get to what Trump has done or not done on the canal since taking office. But I'd like to start with some background. We know the United States built the canal more than a century ago and handed sovereignty over to Panama in 1999 based on two treaties signed and authorized during Jimmy Carter's presidency. What else is worth knowing about the canal to understand the present controversy?

FREEMAN:
Well, I think first it's just critical to underscore how important the canal is to global trade and to the U.S. economy. Every year, the canal handles five percent of all global maritime trade. Nearly seventy-five percent of the commercial flows through the canal are going to or from U.S. ports. And forty percent of all U.S. container traffic, including a big share of our energy exports to Asia, go through the canal each year. So if the canal were to suddenly go offline, it would be majorly disruptive not only to world trade, but especially to the U.S. economy. What's also important to know is that now more than twenty years in which Panama has exclusively operated the canal, it's expanded a lot.
They've made big investments, they've increased its width in certain places, the number of ships that can pass through daily, and that's made it both more and more important to different industries, including U.S. industries. But it's also meant that it's become an important part of how Panama's economy works and how its government functions. So last year, the Panama Canal, the contributions from revenue for the Panama Canal to the Panamanian government made up almost ten percent of the government's total budget.

LINDSAY:
Significant moneymaker.

FREEMAN:
That's right, that's right. And that's a point of pride for the Panamanians, that it's really gone from, you know, an important but necessarily profitable piece of infrastructure under the U.S. to a really professionally, technically run and profitable piece of infrastructure today. Also significant, as you mentioned, the United States controlled and operated and built the canal. And from 1903 to 1979, it essentially controlled, it had a concession to operate a strip of territory dividing Panama fifty miles long from the Caribbean coast to the Pacific.
It was called the Canal Zone, largely U.S. workers in the canal lived in there, really living a life apart from Panamanians. Panamanians in most cases couldn't even enter the Canal Zone, and there were a hundred-thirty U.S. military sites all over Panama, including ten bases along the canal. So it was really like an extension of U.S. territory in another country.

LINDSAY:
Senator John McCain, as I recall, was born there.

FREEMAN:
That's right. Or he was born nearby in the city of Cologne, but the fact there was a hundred-thirty military bases, shows how strategically important this area was, and I think still is to the United States, but it also caused a lot of tension. So everything from the massacre of twenty-two protesters and killing of four U.S. students in a 1964 clash over the canal to other episodes of protest and friction. And you could really say the Panamanian sense of national identity. It was forged in this struggle to get the Canal Zone back and operate the canal. So that explains why it's so important for Panamanians today as well.

LINDSAY:
So was the decision by the United States to give sovereignty over the canal to Panama simply an act of altruism?

FREEMAN:
No, not really. So actually, it started with Henry Kissinger of all people, a cold-eyed realist who during the Nixon administration, Ford administration was thinking about the vulnerability of the canal. I mean, if you go there, I was recently in Panama, you see just how easy it would be and was then to interfere with the functioning of the canal and with its water supply. And I think really that's just a fact of nature. I mean, it's fed by large reservoirs nearby, which you could imagine contaminating. There's other ways you could sabotage the canal without even going inside necessarily the Canal Zone. You could sink a boat outside the locks and put it out of operation.
I think realizing that, Kissinger and then Carter understood that the only way to secure the canal was to make its functionality useful and important to all nations. So the idea was that making the canal neutral, rather than having it be a geopolitical flashpoint or a symbol of U.S. power, putting it in Panamanian hands would make it less likely to be sabotaged or interfered with. So in 1977, they struck two treaties, and what those established was that while Panama would run the canal, was responsible for making sure all nations would have access. The United States retained the permanent right to defend the canal from any threat that might interfere with its continued neutral service.
And that brings us up to today. That's where you see President Trump, people around him, I think especially concerned that that neutrality might now be jeopardized.

LINDSAY:
But Will, Trump didn't mention the Panama Canal on the campaign trail. Then just before Christmas, he posted about the canal on Truth Social, and as I mentioned, he spoke about it during his inaugural address. Why suddenly does the Panama Canal rocket to the top of Donald Trump's foreign policy wishlist?

FREEMAN:
I'll add a couple of reasons. First of all, I'll say that it's been a personal interest for him, going back years. During his first administration, he met with Panamanian President Varela, and I'm told one of the first things he talked about was how he thought the 1977 treaties were a ripoff, that the United States should have never given the canal back, etc. So I think he's held that view-

LINDSAY:
Senator S. I. Hayakawa famously put it at the time, "We stole it fair and square."

FREEMAN:
But I think there's two reasons that it's come to the fore of the agenda for him and others around him recently, and there are two of the main planks of his foreign policy taken straight out of his campaign. One is the idea of peace through strength. That there is a high likelihood of a conflict between the United States and China and that the U.S. needs to actively deter China from beginning that conflict. Controlling the Panama Canal, even if not legally controlling, effectively de facto controlling it, is an important part of that strategy. China gets about a third of its food imports from Latin America, specifically from South America.
And so I think stronger U.S. presence there and even the ability to potentially close the canal to Chinese trade would be a real point of leverage and a potential conflict with China. Now, you don't necessarily see the Trump administration coming out and saying it in those terms because putting in that language would say we're preparing if highlight the neutrality treaty. Right? But I think that's part of the strategic thinking here. There's also a concern and as we can discuss later, that China has been investing in building an infrastructure in Panama. At this point, mostly infrastructure outside the canal, but there's the concern that China could also interfere to deal a blow to the U.S. economy.
And then secondly, I do think, although not as important, there's another goal here, which is American energy dominance. That's big for President Trump. This is supposed to be the presidency of drill, baby drill. And part of drill, baby drill is having someone to send the energy products, right? As I mentioned earlier, I think sixty percent of our exports go through the canal to markets in Asia. And recently there have been significant droughts in the canal that have slowed and limited the number of transits per day. You actually had some liquid natural gas exporters choosing to reroute their product around the Strait of Magellan in South America.
I mean at considerable additional cost and time.

LINDSAY:
It's a much longer route to take.

FREEMAN:
Exactly, exactly right. Because the drought in 2023, 2024 had simply become too severe in the canal.

LINDSAY:
And that means that the water levels in the canal aren't high enough to handle these ships. I mean, the Panama Canal being built more than a hundred years ago was built for ships that were much smaller compared to The Bahamas they built today.

FREEMAN:
The Panamanians to their credit have expanded it, but there are real questions about the future of its water supply given climate change. There's a project in Panama to build a new reservoir that would solve some of this, but many argue it's not moving fast enough. So I think there are energy businesses including important Trump campaign donors that are really concerned about that. And then that also helps put it on the agenda.

LINDSAY:
My understanding was the Biden administration also had some concerns about the Panama Canal. I take it was along the same lines.

FREEMAN:
Absolutely. I think during Trump one, Biden, and now Trump two, using very different methods and tactics, you're seeing the U.S. drive towards the same goal, which is to deter a greater Chinese presence in Panama. And if you asked me even before Trump dialed up the rhetoric, we were having success there. Major infrastructure projects were getting frozen, were getting rolled back. You were seeing Panama align more closely with the U.S. I think Trump came in and said, "I want to see this alignment happen a lot faster and a lot more obvious on both boardways."

LINDSAY:
What precisely is Trump or the Trump administration asking for?

FREEMAN:
Well, I think that it's not entirely clear because Trump says we're going to take the canal back, and it's unclear if he's saying this figuratively or literally, if he means take it back from Chinese influence, which he and others alleged operates in the canal. Panamanians, by the way, reject that. I myself struggle to see how China could interfere in the operation of the canal directly. But as I mentioned earlier, it's very vulnerable to all types of sabotage interference.
So it's unclear if Trump wants to take it back figuratively in that sense, get greater security cooperation with the Panamanians, just have more guarantees that China would never be able to interfere and that perhaps we could exercise some control over who access the canal or if he means it literally. If he literally means reestablishing U.S. control in some form or another.

LINDSAY:
Well, let's talk then about the Panamanian reaction. Panama's President Jose Raul Mulino was elected last year. He's a bit of a political oddity since he was on the underside of the ticket, but the person leading the ticket was disqualified. And my sense is that he's in some ways a man without a political party. One of his goals was to improve relations with the United States, and then Trump comes at him with talk about the canal. And I will note that back in December, President Mulino tweeted that every square meter of the Panama Canal in its adjoining zone is Panama's and remains so.
And he went on to say the sovereignty and independence of our country is non-negotiable, and Trump's response was four words. "We'll see about that." So tell me a little bit about the political reaction or backlash in Panama to Trump's banging the table about the canal.

FREEMAN:
Right, so there's a bit of a paradox here. On the one hand, Panama is one of the most pro-U.S. countries in all of Latin America. It's a place with deep cultural ties to the United States. A lot of people have family, especially among the elites, family that goes, lives, studies in the U.S., comes back for a period of time. Broadly, I'd say it's not an anti-American place, but this issue of the canal is really sensitive. And as I mentioned earlier, I mean it was kind a crucible for forging national identity. So Mulino has to navigate this context in which he's a pro-U.S. president. I mean, everybody that I talked to in Panama described him as one of the most pro-U.S. politicians to lead the country in years who certainly came into office, did not expect to be in this war of words with President Trump.
I think was actually interested and willing to do several things to align Panama more closely with the U.S. and distance with China, which Panama recognized switching recognition away from Taiwan in 2017. But here's the really important thing to know about President Mulino. This is a weak, fragile government. One of the reasons is that his political mentor, ex-President Ricardo Martinelli, is sort of a bombastic, billionaire populist who governed the country in the 2000s. He is currently dodging money laundering charges, hiding out in the Nicaraguan Embassy in Panama.
And the deal that he made with President Mulino is, "Well, I'm going to be disqualified. You get yourself elected on our ticket and then you clean up my legal problems and I get out at a consulate and we govern together." Mulino has not upheld that end of the bargain. I think credit to him, I mean he is showing he cares about the law more than that. But obviously, ex-President Martinelli is enraged and he is using every lever at his disposal, I think, to try to undermine this government. He probably holds more sway within their shared political party in the legislature than President Mulino himself does. He has significant influence in the media and he's quite popular.
Despite being corrupt, he oversaw an economic boom in Panama. So he is remembered fondly. Besides that, Mulino is facing a number of kind of gargantuan obstacles. One is an unprecedented fiscal deficit in Panama, thanks to the spending of his predecessors. Two is almost double-digit unemployment. Three is the fact that he's locked in this legal quagmire with a mining company that spent twenty years invested ten billion of Panama to open a copper mine that was closed by mass protests and a Supreme Court ruling a couple of years ago. So he's got to figure out how do you reactivate the economy with no money? How do you govern with no political party? How do you open a mine?
Maybe contravening the law that's going to be really unpopular and risk setting up these mass protests once again. He's confronting all of that. And the last thing he wanted or needed was to be in a fight with the guy he assumed would be his ally in all this, President Donald Trump.

LINDSAY:
I take it that President Mulino's popularity among Panamanians has fallen substantially over the course of the year.

FREEMAN:
That's right. It was in the seventies when he started off, and the last poll I've seen puts him at twenty-nine percent. He's at a real risk of becoming a lame duck. And for me, why that really matters for the U.S., we might want a stable Panama. I think that's in our interest, but going beyond that, we need this president to cooperate with the Panama Canal Authority, independent body that runs the canal to build the new reservoir, I mentioned earlier. If Panama doesn't do that in the next few years, all these conversations about interference, neutrality are going to be secondary to the fact that the canal will not have enough water very plausibly to function normally.

LINDSAY:
So let's talk about what it is that President Mulino has been willing to give President Trump so far, particularly against the backdrop of there was a vulnerable line in your America's Quarterly piece, that there is a thin line between being a puppet and a partner. So tell me about what it is Mulino has been willing to do and then we'll talk about whether that's enough for President Trump and the Trump administration.

FREEMAN:
That line, by the way, coming from a member of the foreign ministry in Panama, so not my words, but his, and I think that speaks to the kind of discomfort in this government, which wants to be pro-U.S., wants pivot that way, but doesn't want to feel like it's being bullied into doing that, right? It wants to show that it's doing it on its own initiative. So Secretary of State Marco Rubio went to Panama in early February and he got a couple of concessions to start. I mean, one is that Panama left the Belt and Road Initiative. It was the first country in Latin America to join it.

LINDSAY:
This is the Chinese Belt Road Initiative.

FREEMAN:
To be honest, this was more symbolic than anything. China had not really built major infrastructure in Panama, and a lot of those projects had been slowing down. As I mentioned earlier. The other thing that came out of that visit was Panama announcing an audit of a twenty-five-year concession to a Hong Kong company that currently operates two canal-side ports, outside the locks. So it's not within the canal but it's near enough that you could worry about some kind of accident or sabotage potentially shutting down the ports. And as we know, since China took de facto control of Hong Kong, there's a lot of levers to pressure companies there. So the audit was announced.
I think even if this BlackRock deal that's been all over the news to buy those two ports among others doesn't go through because of Chinese pressure, I think Panama may still end those concessions. So those were the first big, let's say, wins for this approach. Second is that Secretary of Defense Pete Hegseth was just in Panama. Now what came out of that depends on who you ask. Typically, when governments put out joint declarations after a meeting, it says the same thing in either language. In this case, the English-language version was much longer than the Spanish-language version. We're also trying to figure out who changed the text right before publication. Presumably-

LINDSAY:
There's also a question whether things were taken out or things were added.

FREEMAN:
Exactly. That's right. So the two things we know roughly from that is that the U.S. is going to have a military presence again in Panama on a rotational basis. So it's not, at least according to the letter of this document, going to have permanent bases that would actually violate the Neutrality Treaty under which Panama is running the canal.

LINDSAY:
Well, let me ask you just for clarification on that, Will, because as you noted at the top of our conversation, the treaties handing the canal to Panama guaranteed the United States the right in perpetuity to defend the security of the canal.

FREEMAN:
Also said, and that's where it gets a little confusing. They also said that there will be no permanent military presence in Panama except for the Panamanians.

LINDSAY:
So that's why rotational becomes significant.

FREEMAN:
There you go. That's right. But there are plenty of Panamanians who are looking at this and saying, "How rotational? There's a permanent presence through rotation. Isn't that a little bit like having a permanent military base?" And we're talking about the kind of reactivation here of at least two significant military sites that the U.S. vacated in 1999 when Panama took control of the canal on either end. So in quite strategic locations. And the other thing that came out of this, and here we're going back to the realm of symbolism, was that the U.S. announced that it's obtained the right to have its navy warships pass first and free through the canal.
So important to clarify, they already go first. That's part of the treaty. So they already get to skip the line. If there is another, say, another drought and another queue heading into the canal, they can already pass. But according to the U.S., we now also are going to get free passage. Now, I say symbolic on this because in the last twentyfive years, the DOD has spent on average less than a million dollars per year on these fees. I mean, it's nothing. It's pennies on-

LINDSAY:
Well, many U.S. Naval ships cannot pass through the canal. They're simply too big.

FREEMAN:
That's also right. So this seems more symbolic, but it's something that President Trump clearly cared about that his team wanted to be able to say, "We have first and free." For Panama it represents an issue because per the treaty, warships of another country... If the U.S. gets free passage, all countries are supposed to get free passage for their warships. Now, the Panamanians have invented a kind of clever work around here where they're going to say, "Well, we're still going to charge you the fee, but we're going to compensate you for that money by giving you maritime services on either end." Refueling, things like that.

LINDSAY:
So sort of like a rebate.

FREEMAN:
That's right. So they're very particular. Look, we want the wording to be, we've figured out a mechanism. The U.S. wants to say first and free. I know it's getting a little technical. These are differences of language, but they really matter because you adopt the phrase first and free, it starts to sound like Panama's violating its obligations, and Mulino looks like a bit of a pushover, which I think is his big concern in all this.

LINDSAY:
Which feeds into Panama's domestic politics and sense of Panamanian nationalism in the fear that Panama's being pushed around by Washington.

FREEMAN:
Well, exactly, and that's why President Mulino was really intent to say, coming out of this meeting that he'd secured one big win for Panama, which is that he got Secretary of Defense Peter Hegseth, to recognize the sovereignty of Panama, and the Panama Canal is Panamanian. Which Hegseth said in a few media appearances but then we also have this kind of different rhetoric from President Trump and in the English language version of their joint declaration, you don't see anything about Panamanian sovereignty.
So that's only in the Spanish, and it does make you question, where is all this heading? What did they really agree to? What are the different understandings of the agreement here? And is this thing all over or not? My prediction is it's not.

LINDSAY:
Follow up question on that. President Trump recently had a Cabinet meeting and the topic of the Panama Canal came up and President Trump said, let me quote him here. "We've moved a lot of troops to Panama and filled up some areas that we used to have. We didn't have any longer, but we have them now. I think that's in very good control, right?" Secretary of Defense Hegseth responded by saying, "Yes, sir." Does that mean that U.S. military forces are already in the canal or in the canal zone?

FREEMAN:
That I'm aware of, not right now. There's talk of some joint training exercises coming up. I think the question that raises as well, is President Trump satisfied with what's been agreed so far? It would seem like it from that comment, but we know this is a president who's pretty disposed to change his mind to decide the deals initially made are no longer good enough. Just look at the USMCA. That was his deal, now he calls it terrible.

LINDSAY:
As the trade deal involving United States, Canada, and Mexico, that the president essentially is ignoring with his new Liberation Day trade policy and decisions he'd made even before that.

FREEMAN:
That's right. Panamanians more critical of President Mulino say this exact cycle is going to happen in Panama. I mean, he is showing that he's willing to make kind of whatever concession the U.S. asked for. I mean, he would say he's held his ground on certain points. He even said that when Hegseth showed up, Hegseth was asking for Panama to hand back territory and that he held the line on that. We haven't heard that version from the U.S. side, but I think that the worry in Panama is that this is a slippery slope and President Trump's learned that these kinds of pressure tactics work and the U.S. has immense leverage in Panama. This is a dollarized economy.

LINDSAY:
What does that mean when you say it's a dollarized economy?

FREEMAN:
Well, Panama's basically is only ever used since it became an independent country in 1903, splitting away from Columbia. It's basically only ever used the dollar, the U.S. dollar. So the banking system there relies on a flow of dollars. Before the 1989 invasion of Panama, we simply flipped off the switch. We starved the banking system of dollars, and the next day public employees couldn't get paid. So that gives you a sense of the huge leverage that the U.S. has here, and that's why Panamanians are worried that Trump's figured out these pressure tactics will work, and if he wants the canal back and Mulino doesn't put up any real resistance, that could easily happen. That's the view among some Panamanians.

LINDSAY:
My understanding is that a lot of Panamanians are, as you suggest, worried that President Trump won't take no for an answer. And I think a lot of the conversation here in the States is focused on whether to put order of the U.S. military to seize control of the canal. He actually tasked, as I understand it, the Pentagon, to come up with military plans last month. Further note that Panama does not have a formal military. It has self-defense forces, but not a military. To my understanding is barred in the Panamanian constitution. Do you think it's far more likely that Trump would go with economic coercion of the sort you suggested, Will, as opposed to sending U.S. forces into the canal zone?

FREEMAN:
Absolutely. I mean, even during the 1989 U.S. invasion of Panama to depose dictator Manuel Noriega, that's back when the U.S. still controlled the canal zone. There were military bases all over, and even then the U.S. military really tried to kind of slow walk this whole idea of invading Panama. So they even had the bases there. They didn't want to do this. The logistics of it were really complicated. They were worried about how messy it could get. So to do it today when we don't have that standing military presence, at least for now, I think it would provoke a lot of opposition internally.
That said, we've seen already Trump's willing to use tools like stripping visas from government officials to get his way in Latin America. Colombia briefly tried to resist some of his deportation efforts, and the next thing you knew, the entire Colombian government and all of its "allies" were told that they were going to lose their U.S. visas. That combined with a tariff threat on Colombia pretty quickly reversed the situation. So you could imagine him doing the same things at Panama. You could imagine him trying to use different tools to reduce the trade flows through the canal.
Obviously that would hurt us, but it would hurt Panama proportionally even more given how much their government relies on that source of revenue.

LINDSAY:
So tell me about the ramifications of all of this for U.S. relations in Latin America. We know there's a long history of resentment toward the United States over Yankee imperialism. Where do you see this going and are there pain points that you're worried about?

FREEMAN:
Well, oddly enough, and I think a lot of us, Latin America must have been puzzling over this. I think in 2025, Canadian Yankee-Go-Home sentiment is stronger than that in Latin America. If this were all playing out in the seventies or even eighties, I think you'd see a lot stronger of a unified bottom-up reaction to this in Panama. But you know what's happening, I mean, I do think a majority of Panamanians, of course, want the canal to remain Panamanian and Mulino's already paying a political price for what's seen as slipperiness on this issue.
But that said, there was a trending hashtag on Panamanian social media. "Que Vengo Trump," which means, "Please Trump, come here." And that comes from the fact that Panama is one of the most unequal countries in the world. The floor of the income distributions raised a little bit somewhat in the last years, the ceilings just exploded upwards. People are irate over corruption, inequality, and a lot of people in Panama I think see the canal as basically the toy of the political elites and financial elites. I mean, it benefits them. It creates a nice bubble of wealth for them to administer and sometimes steal, doesn't help the ordinary person.
So you're seeing, I think today in Latin America, and that applies to other countries as well, people are angrier at their own elites than they are at the U.S. and sort of the perception that the U.S. might be pushing them around. I see it as actually a region where that kind of nationalism has weakened a lot and continues to do so. Now, if Trump tries to really retake canal in full, not just through these symbolic moves or rotational military presence. I do predict that's going to inflame Panamanian nationalism and maybe nationalism elsewhere in Latin America.
But I think zooming out this is really, It's been kind of a bold opening move on the part of the Trump administration to set the tone on how it wants to compete with China in the region and what types of tactics it's going to use to do so. And that's going to be a theme in what remains of the Trump administration.

LINDSAY:
But Will, what you've described so far has largely been a heavy dose of stick. I haven't heard much in the way of carrots. The Chinese have been known for doling out a lot of carrots and the Trump approach be sustainable, or it will in fact engender the sort of backlash that could derail it.

FREEMAN:
Right. Well, I wrote a piece for the Financial Times a couple of months ago called a New Monroe Doctrine Won't Work in South America. Monroe Doctrine, of course, being that foreign policy principle that the U.S. should seek to prevent other great powers from establishing presence or much influence in the Western hemisphere.

LINDSAY:
What the New York Post has updated as the Donroe Doctrine.

FREEMAN:
The Donroe Doctrine. That's right. So Monroe Doctrine is kind of all about stick and not so much carrot. And I think that that approach, although it's not my preferred approach, and I don't think it strengthens our relationships in all the ways we need, but I think that ultimately when push comes to shove, can it work in Mexico and Central America? Largely, yes, because those countries depend a lot on trade with the United States. The asymmetries in those relationships are just huge.

LINDSAY:
El Salvador has been very eager to work with the Trump administration under president.

FREEMAN:
That's right. I think in Bukele's case, he got some skeletons in the closet. I think this sort of all stick, low carrot approach can work in Mexico, Central America, not necessarily ideal, but it can work especially to push out China, which I would say has not played that hard for influence in those countries. Yes, it's increased investment a lot last few years in Mexico. Yes, it got most Central American countries to switch recognition away from Taiwan. But beyond that, I mean it is not making Central America or Mexico a key part of its foreign policy strategy the way it is. For instance, making Peru part of that strategy or Brazil or other South American countries, Chile.
So I think that the all stick, no carrot approach, again, it's going to maybe work closer to home. I don't think it's going to work in South America. Why? Because those economies are structurally complementary to that of China. So they are big. They've more and more doubling down on being big ag producers and mineral producers. Who's buying all those agricultural goods, who's buying all those minerals? Largely it's China. We're not going to buy them with a smaller population and being rich in those types of products ourselves. So we really can't compete and aren't willing to compete in terms of trade for influence in South America.
We retain quite a bit of it in the security space. But if you try to go to Peru or Brazil and use the sort of heavy-handed approach we're seeing with Panama, I think it's going to backfire.

LINDSAY:
What about the argument that if you look at Brazil, you look at Peru, you look at Colombia, Chile, they have a real problem now and it's going to get bigger in the near future because China's not going to be able to sell its goods into the American market, so they're going to dump them in Latin America, South America, in particular. I note that the Brazilians have already put up a number of protectionist roadblocks, because they're worried precisely about it. I mean, I take your point that they have commodities they want to sell, but they also have domestic industries that they want to maintain.

FREEMAN:
Especially Brazil, Argentina, I mean these are countries with an industrial base in a way that Peru, even Colombia, they never industrialized as much and they're not going to have as much to lose. But I do think you've seen these anti-dumping investigations announced in a number of places, and at least to this bigger question of how is the U.S.-China trade war, which seems like the one sort of thing we know has come out of the last few weeks, how is that going to affect Latin America? I mean, speaking of the canal, I'm talking to people who work at the Canal Authority the last few days, and some of them are expecting trade flows to diminish through the canal. That's going to be-

LINDSAY:
Well, that's going to exacerbate President Mulino's problem because he has a big deficit, and you're telling me his revenues are going to fall.

FREEMAN:
Right? Very possibly. I mean, if we see less U.S.-China trade happening through the canal, will other trade flows be able to pick up the slack? Not clear yet.

LINDSAY:
On that note, I'll close up this episode of the President's Inbox. My guest has been Will Freeman fellow for Latin America at the Council. Will, as always its a delight to chat.

FREEMAN:
Thanks so much. My pleasure.

LINDSAY:
Please subscribe to the President's Inbox on Apple Podcasts, YouTube, Spotify, wherever you listen and leave us a review. We love the feedback. The publications mentioned in this episode and a transcript of our conversation are available on the podcast page for the President's Inbox on CFR.org. As always, opinions expressed on the President's Inbox are solely those are the host or our guests, not of CFR, which takes no institutional positions on matters of policy. Today's episode was produced by Justin Schuster, with director of podcasting, Gabrielle Sierra. This is Jim Lindsay. Thanks for listening.