Donald Trump’s recent public attack on Panama over the fees charged for using the Panama Canal initially seemed to come out of nowhere. Trump blasted Panama for what he called “ridiculous” fees and suggested that the U.S. might demand the return of the canal if Panama didn’t reduce them. His harsh words raised eyebrows, especially since no clear reason was given for his sudden animosity towards the country.
But it turns out that there may be a hidden reason behind Trump’s outburst: his organization, the Trump Organization, is currently facing serious accusations of tax evasion in Panama.
The legal issue involves a hotel in Panama City that was managed by Trump’s business, and which bore the Trump name. Back in 2019, the hotel’s owners, led by Orestes Fintiklis and his company, Ithaca Capital Partners, accused Trump’s businesses of not paying taxes on millions of dollars in earnings from the hotel. The Trump Organization allegedly failed to pay the required 12.5% tax on its earnings and misreported the number of employees at the hotel in order to avoid paying Panamanian social security taxes.
The legal battle escalated when the Panamanian government audited the hotel and found major financial irregularities. As a result, Fintiklis and his company were forced to pay the taxes that Trump’s businesses owed. Fintiklis has argued that, had he known about the tax problems, he would never have entered into the deal with Trump’s company in the first place. The case is still ongoing in U.S. courts.
This legal dispute could explain Trump’s sudden and sharp criticism of Panama. His threat to “take back” the canal and label Panama’s actions as a “rip-off” seemed out of the blue at first. But as more details about the ongoing tax case emerged, it became clear that Trump may be trying to use his influence to pressure Panama into dropping the tax evasion investigation.
While there is no direct evidence linking Trump’s Canal comments to the tax case, many observers now suspect that his words are part of a larger strategy to intimidate Panama.
Ana Navarro, a political strategist, suggested on social media that Trump might be threatening Panama to deflect attention from his legal troubles, specifically the investigation into his company’s tax practices in the country.
“Now we know what the sudden threats against Panama and ownership of the Panama Canal are all about,” she wrote on X, while linking to a 2019 ProPublica article about the hotel tax controversy.
Trump’s comments about the Panama Canal are legally complicated. The U.S. handed over control of the Canal to Panama in 1999 under a treaty signed by President Jimmy Carter, and Trump has publicly criticized that deal as “foolish.” His comments about reclaiming the canal are unlikely to result in any immediate action, but they have sparked tensions between the two countries.
With the tax investigation still unresolved and the dispute with Panama growing, it’s clear that Trump’s recent statements were not just an unprovoked attack. There may be much more behind his words than initially met the eye—especially as he prepares to take office again in January. Panama, for its part, has made it clear that it will defend its sovereignty, and any future conflict will likely require careful international negotiation.
