One of the subjects President-elect Donald Trump chose to elevate via social media posts on Christmas morning was the Panama Canal — a choice at once amazing and apt.
Amazing, first, because the canal was not a featured issue in the 2024 presidential campaign, nor had it been in Trump's previous campaigns. It was not a focus of his foreign policy during his first term as president and, in fact, has not been salient in American politics or policy debates since the era of disco.
But there it was, in a Truth Social post and then a preholiday speech in Phoenix, where Trump demanded lower shipping rates through the canal or "we will demand that the Panama Canal be returned to us, in full, quickly and without question."
Amazing.
Yet, for Trump to raise it now made a kind of sense. It fit with Trump's other promises and threats stressing his "America First" theme in U.S. trade and foreign relations. The president-elect has long promoted the idea that the U.S. has been exploited and short-changed and even pushed around by allies and beneficiaries — not to mention rivals such as China.
But tapping into this familiar reservoir of resentment with a specific reference to the Panama Canal also recalls a moment that had enormous significance for the Republican Party and for the American experience of the past half-century.
Because there's a case to be made that the Panama Canal issue was the turning point in Ronald Reagan's career as a candidate for president. Without it, he might well have been just another two-term governor of California whose White House dream never came true.
An issue, a tactic and a candidate meet
The year was 1976, and Americans were both celebrating the Bicentennial Year and reeling from a series of traumatic events. The Vietnam War had arguably split the country more dramatically than any conflict since the Civil War. The painful chapter had ended badly, with the last American personnel scrambling onto helicopters on the U.S. Embassy roof.
Former President Richard Nixon, elected in 1968 to "bring us together" and reelected in 1972 in a 49-state landslide, was caught in a web of campaign crimes, lies and cover-ups that forced his resignation on the brink of impeachment in 1974. He was pardoned by his successor, Gerald Ford.
Ford gave the country a kind of breathing space for a time as he looked toward election in his own right. But inflation was rising in the election year of 1976, driven largely by energy prices that spiked with the cost of imported oil. The economy was sluggish at best, with unemployment well above the levels of the 1960s. Yet the ambitious younger Republicans chose not to challenge an incumbent of their own party.
Reagan's calculus was different. He had just left the California governorship the previous year and had the backing of many Western and Southern party leaders as well as conservative activists. Reagan was also in his mid-60s, which at the time was regarded as posing the "age issue." His brief bid for the GOP nomination in 1968 had been too little, too late. The Bicentennial Year looked like it might be his last chance.
But Reagan had trouble raising money against the incumbent and was not connecting with the party leaders in the early primary states. He lost in New Hampshire and Florida and three other early primaries. His funding sources were drying up. Some in his camp were urging him to pack it in. Late in March, political commentator William F. Buckley wrote, "Ronald Reagan, it would appear, has lost his fight." Another archconservative columnist, James J. Kilpatrick, saw Reagan's campaign as "just about played out." Several Reagan intimates and biographers have written that Reagan's wife, Nancy, wanted him out to spare him embarrassment.
Instead, Reagan dug in his heels. He looked ahead to the March 23 primary in North Carolina, a state where he had the backing of the state's senior Sen. Jesse Helms, an ultraconservative icon. The combined campaign teams hit upon a tactic and an issue. They bought time on local TV stations around the state and ran a prerecorded speech Reagan had given before on the subject of the Panama Canal and the Ford administration plan to "give it away."
Why did the canal issue resonate?
Most Americans learned a bit about the canal in school and rarely gave it another thought. They knew it was a series of waterways across a narrow isthmus of Central America that connected the Atlantic and Pacific, saving weeks off the sailing time between oceans. They may even have recalled that the U.S. under President Theodore Roosevelt helped install a friendly local government in Panama and took over the canal project abandoned by the French (after injuries and disease had claimed about 20,000 workers' lives).
But relatively few people then or now recall how the Canal Zone had become a scene of anti-American agitation and unrest in the 1960s. For decades, presidents in both parties had moved negotiations with Panama along toward an eventual handover of the zone and the operation of the canal, but it had yet to be accomplished. But the midpoint of that decade, just the suggestion of a "canal giveaway" as another American humiliation in the wake of Vietnam and Watergate had been enough to bring loud applause at Reagan events in the South. So, the campaign went all-in on it in North Carolina.
The effect was electrifying. Reagan said the canal should not be ceded to Panama or anyone else. "We built it, we bought it and we're going to keep it," he said. It was language Helms had used, borrowing from his neighboring state's senior Sen. Strom Thurmond of neighboring South Carolina. Helms and Thurmond had anchored a small but potent contingent of primarily Southern senators who resisted talk of the canal's transfer to Panama.
The campaign Helms, Thurmond and Reagan ran often featured misinformation about the Panamanian government being "Marxist" and other allegations. But it resonated with many Americans who saw the issue as a test of nationalism — even patriotism. And most importantly, it worked. When North Carolina Republicans voted, they gave Reagan a majority and a 6-point win over Ford.
Overnight, the national narrative shifted. A boring GOP primary was suddenly a barnburner in the eyes of the media. Reagan's coffers filled again. He rode the Panama issue and the North Carolina momentum to wins in other Southern states, in Indiana and Nebraska and in the West. By the time the convention met in Kansas City that summer, the challenger had almost closed the gap. Reagan then chose a moderate Pennsylvania senator as his prospective running mate in an effort to corral that delegation, a move that cost momentum and left him falling short.
Ford, in turn, was narrowly defeated in November 1976 by former Georgia Gov. Jimmy Carter, a Democrat who moved swiftly to close the deal with Panama.
Ceding control of the canal had actually been a goal of Ford's secretary of state, Henry Kissinger, the longtime adviser to former President Nixon. Kissinger saw the transfer of the canal as the best way to improve U.S. standing in Latin America generally. Carter had been cool to the idea as a candidate, even saying as late as his October debate with Ford that he would not give up "practical control of the Panama Canal Zone any time in the foreseeable future." But after Election Day, influenced by Cyrus Vance, his choice for secretary of state, Carter changed his mind and gave the long-running negotiations fresh impetus.
The efforts of Helms, Thurmond and others came close to denying the treaty the two-thirds vote it needed in the Senate. But in the end, Senate Republican Leader Howard Baker of Tennessee delivered just enough of his colleagues to put the deal over the top by a single vote.
The relevant treaties were signed in September of 1977.
Reagan remained opposed to the Panama deal but "noticeably muted his rhetoric in 1977 when the treaties were finally signed by President Jimmy Carter," according to Lou Cannon, the reporter and biographer who covered Reagan more closely and for longer than anyone. In President Reagan: The Role of a Lifetime, Cannon reports that "Reagan's interest in the Panama Canal declined after the issue had served its political purpose." Cannon has written that Reagan's pollster told him the issue was primarily of interest to hardcore conservatives. By 1980, Reagan had that category locked up.
Trump, then and now
There's no public record of Trump's attitude toward the Panama treaties in the late 1970s. It is possible he opposed them at the time as a 30-year-old businessman trying to shift his real estate focus from Queens to Manhattan.
What is known is that Trump has proven himself at least as adept as Reagan at hearing which issues excite the crowds at his rallies. The Panama issue this week was part of a fusillade of "America First" pronouncements about asserting U.S. interests abroad far more aggressively in his second term. These included Trump's renewed interest in acquiring the Arctic island of Greenland, a Danish possession that is not for sale. In what may have been a less serious moment, Trump also listed "Canada" among the items on his Christmas wish list.
In this cluster of Trump statements, the reference to Panama seems likeliest to get the most response from the crowd at one of those rallies. It is most likely to keep the MAGA flame lit and the movement energy flowing.
And for the moment, the return to Panama has also reminded us of Trump's unparalleled ability to remake the political conversation all by himself in the middle of the night.
Was he intending to reopen the canal debate and pressure Panama into lower fees for U.S. shipping? Is there a similar design behind the Greenland demands? Or is there more to the Canada mention than a desire to troll Prime Minister Justin Trudeau?
It could become clear what form of pressure Trump is ready to bring on Panama — if any — when he is back in office. The issue may fade for him as it did for Reagan. Other issues may intrude, as they did for Reagan.
And, like his predecessor, Trump will know where to find a reliable prompt for a roar from the crowd.
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