The canal is an 82-km artificial waterway that connects the Pacific and Atlantic Oceans through Panama and is critical to U.S. imports. File.
| Photo Credit: AP

Newly sworn-in President Donald Trump vowed on Monday that the United States would take back the Panama Canal as he delivered an inauguration speech in which he invoked the 19th century expansionist doctrine of “Manifest Destiny.”

Doubling down on his pre-inauguration threat to reimpose U.S. control over the canal, Trump again accused Panama of breaking the promises it made for the final transfer of the strategic waterway in 1999 and of ceding its operation to China – claims that the Panamanian government has vehemently denied.

Trump signs slew of executive orders on Day 1: A full list

“We didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump said.

He gave no further details on when or how he intended to do that but had previously refused to rule out possible use of military force, which drew criticism from Washington’s Latin American friends and foes alike.

Panama’s President Jose Raul Mulino on Monday responded on X that his country has administered the canal responsibly for world trade, including for the U.S., and that it “is and will continue to be Panamanian.”

Trump’s reiteration of his threat about the Panama Canal as he began his second term was his most blatant mention of an agenda for territorial expansion that he has laid out in recent weeks.

In the run-up to his inauguration, he had also said he wanted to acquire Greenland, portraying the overseas Danish territory as crucial for U.S. national security interests, and mused about turning Canada into a U.S. state.

Possible encouragement for Russia, China ambitions

Critics have accused Trump of language that evokes modern-day imperialism, suggesting such rhetoric could encourage Russia on its war in Ukraine and give justification to China if it decides to invade self-ruled Taiwan.

Some analysts have questioned whether Trump is serious about pursuing what critics say would be a land grab, speculating he may be laying down an extreme negotiating position to squeeze out concessions later on. Also, Trump, in first term from 2017-2021, was known for issuing some headline-grabbing threats and pronouncements that he failed to deliver on.

While Trump made no mention of Greenland or Canada in his inaugural address, he offered hints of territorial aspirations during his second four-year term.

“The United States will once again consider itself a growing nation, one that increases our wealth, expands our territory, builds our cities, raises our expectations and carries our flag into new and beautiful horizons,” he said.

“And we will pursue our Manifest Destiny into the stars, launching American astronauts to plant the stars and stripes on the planet Mars,” Trump added.

Manifest Destiny, a phrase originally coined in the mid-1800s, was the belief in a God-ordained right of the U.S. to expand its control throughout North America, and was used to justify the seizure of lands from Mexico and from Native Americans.

In Monday’s speech, Trump also repeated his promise to change the name of the Gulf of Mexico to the Gulf of America.

Trump said the U.S. had “foolishly” given the Panama Canal to Panama.

The United States largely built the canal and administered territory surrounding the passage for decades. But the United States and Panama signed a pair of accords in 1977 that paved the way for the canal’s return to full Panamanian control. The United States handed it over in 1999 after a period of joint administration.

“We have been treated very badly from this foolish gift that should have never been made, and Panama’s promise to us has been broken. The purpose of our deal and the spirit of our treaty has been totally violated,” Trump said.

He said U.S. ships are “being severely overcharged and not treated fairly in any way, shape or form.” Panama has insisted that it treats fairly all vessels that transit the canal, and has said China has no control over its administration.

China does not control or administer the canal, but a subsidiary of Hong Kong-based CK Hutchison Holdings 0001.HK has long managed two ports located on the canal’s Caribbean and Pacific entrances.

The canal is an 82-km (51-mile) artificial waterway that connects the Pacific and Atlantic Oceans through Panama and is critical to U.S. imports of autos and commercial goods by container ships from Asia, and for U.S. exports of commodities, including liquefied natural gas. (Reporting by Matt Spetalnick, Jeff Mason, Nandita Bose, Katharine Jackson in Washington, Elida Moreno in Panama City; writing by Matt Spetalnick; editing by Don Durfee and Alistair Bell)

President-elect Donald Trump speaks at a rally ahead of the 60th Presidential Inauguration, on January 19, 2025, in Washington.
| Photo Credit: AP

Soon after being sworn in as the 47th President of the United States, Donald Trump is likely to sign a barrage of executive orders, including those related to immigration, border security, energy and governance, his close aide revealed on Sunday (January 19, 2025).

An executive order is an order issued unilaterally by the president which carries the force of law. Unlike legislation, executive orders do not require Congressional approval. Though the Congress cannot overturn them, they can be challenged in the court of law.

“The breadth of the orders, which would make major changes to immigration, energy and government hiring policies, illustrates the urgency with which Trump and his team plan to launch an ambitious agenda,” The Wall Street Journal said.

In a briefing with senior Republican leaders, Stephen Miller, Trump’s incoming White House deputy chief of staff for policy, revealed that the executive orders will include declaring emergency on the southern border, preparing military deployment on the borders, classifying cartels as “foreign terrorist organisations”, reinstating the “Remain in Mexico” policy, ending the “Catch and Release” policy, and declaring emergency related to energy.

Also on the list are opening up offshore and Arctic drilling, speeding up pipeline licensing/construction, reforms to remove government employees and rescinding DEI and gender-related orders.

Giving a preview of the executive orders at Trump’s ‘victory rally’ in downtown Washington, Miller said, “He (Trump) has always been fighting for all of us. And what is that going to look like come Monday afternoon? It’s going to mean an executive order ending border invasion, sending illegal immigrants home, and taking America back.” “It’s going to mean the eradication of criminal cartels and foreign gangs which are preying on our people. It’s going to mean justice for every American citizen who has lost a loved one to an illegal alien,” Miller added.

Trump, 78, is also expected to roll back some of the executive orders and actions of outgoing President Joe Biden.

Prominent among them include the Paris Agreement on climate change, lifting restrictions on fossil fuel production, and expanding domestic oil drilling.

The rupee may depreciate 8-10% against the U.S.. dollar during the Trump 2.0 regime, said a SBI research report, even as the local currency hit its all-time low on Monday (November 11, 2024).

The report, titled U.S. Presidential Election 2024: How Trump 2.0 Impacts India’s and Global Economy, emphasised that the rupee can have a brief spell of depreciation against the U.S. dollar, followed by appreciation.

Also read | What’s at stake for global markets in a Trump presidency

Donald J Trump’s historical comeback as the 47th President of the United States adds a morphine shot to the markets and select asset classes even as the focus is now shifting to wider economic ramifications and supply chain realignments, the report said.

“Trump’s victory introduces a mix of challenges and opportunities for India. While the potential for increased tariffs, H-1B restrictions, and a strong dollar could bring short-term volatility…But it also presents India with long-term incentives to expand its manufacturing, diversify export markets, and enhance economic self-reliance,” it added.

It further said the 10-year yield shows no obvious trends, and the effect will be context-sensitive, going ahead.

“USD/INR has shown range bound movement, and the rupee can have a brief spell of depreciation followed by appreciation…Volatility in Indian equity markets showing signs of reduction,” the SBI’s study said.

Declining for the fourth straight session, the rupee dropped 2 paise to hit a new lifetime low of 84.39 (provisional) against the US dollar on Monday, weighed down by persistent foreign fund outflows and a muted trend in domestic equities.

Forex traders said the rupee is likely to remain under pressure unless there is a softening in the dollar index or a slowdown in foreign fund outflows.

The report emphasised that “the fear” that the rupee will depreciate sharply is unfounded.

During the Trump 1.0, it said, the rupee depreciated by 11 per cent, less than it depreciated during the Joe Biden term.

While a stronger dollar might result in short-term capital outflows for short-term as investors flock to dollar-based assets, on a positive note, a lower rupee might provide an export advantage, potentially boosting revenues in sectors like textiles, manufacturing, and agriculture, the research report said.

“Still, we expect a depreciation of 8-10 per cent during Trump 2.0,” the SBI research report said.

It also noted that the depreciation of the rupee may increase the import cost of oil and other commodities.

“As per our estimate, a 5 per cent decline in rupee will increase inflation by 25-30 bps. So, the impact will be very less on inflation,” it said.

According to the report, India may see shifts in foreign direct investments (FDIs) during Trump 2.0. The Trump 1.0 administration saw significant regulatory changes aimed at attracting investments back to the US, and this was reflected in data also.

“However, India is no longer dependent on the traditional sources of FDI inflows… unlike the recent past, FDI is now coming in many new sectors like non-conventional energy, sea transport, medical and surgical appliances, etc,” it said.

This trend could continue, thus offsetting the possibility of a decline in FDI flows in traditional sectors in Trump 2.0, if any.

The SBI report further said if the Trump administration opts to limit work visas, particularly the H-1B visa programme, Indian IT and ITeS sectors may see increased costs.

H-1B visa restrictions can lead to decreased labour mobility, affecting the hiring capabilities of Indian IT companies operating in the US.

This, the report said, may result in Indian firms to allocate resources towards hiring locally in the US at a higher cost, which could strain margins for companies.

During Trump 1.0 the non-immigrant visas issued by the U.S. largely stagnated around 10 lakh per year. However, in 2023, about 14 lakh Indians received non-immigrant visas, the report said.