Trump Owes Panama Unpaid Corporate Taxes
Yesterday we looked briefly at a weird situation developing between Trump and Panama. It turns out, it’s even weirder than it looked at first glance. Sean O’Driscoll’s reporting makes it clear that Trump’s outbursts against Panama was because his properties down there are tax scofflaws and the Trumpanzee Organization is in court. Trump’s private slimy businesses in Panama “failed to pay 12.5% taxes on the millions of dollars they earned from managing the Panama City hotel… [and] the Trump units failed to correctly report the number of people the hotel employed so that he could avoid Panamanian social security payments… The litigation is still before the courts…The issue is important because Trump is potentially pushing the U.S towards conflict with Panama after accusing the country of financial wrongdoing.
Panama's president, José Raúl Mulino, replied with a video posted on Twitter: "Every square meter of the Panama Canal and its adjacent areas belong to Panama and will continue belonging to Panama."
Trump replied on Truth Social: "We'll see about that."
Ana Navarro Flores, a prominent Nicaraguan-American political strategist and commentator, suggested on Twitter on Sunday that Trump is threatening to invade Panama because he still owes millions of dollars of taxes in the country.
"Now we know what the sudden threats against Panama and ownership of the Panama Canal are all about," she wrote, while linking to a 2019 ProPublica article about the hotel tax controversy.
This latest bluster about reclaiming the Panama Canal— layered as it is over unresolved allegations of tax evasion and financial misconduct in Panama— reveals troubling, if predictable, aspects of Trump’s character that make him uniquely unfit for leadership, highlighting not just Trump's chronic self-interest but also his reckless willingness to conflate personal grievances with national policy, posing profound dangers to both American democracy and global stability.
Anyone who has followed Trump’s sleazy career beyond The Apprentice easily understands that his knee-jerk threats to reclaim the Panama Canal reflect his pathological inability to separate personal slights from matters of state. Instead of approaching international disputes through careful diplomacy, he lashes out with threats rooted in perceived insults to his ego. This pattern of behavior— prioritizing personal vendettas over national interests— demonstrates a fundamental failure to grasp the responsibility and gravity of presidential power. By bullying Panama on the world stage, Trump is attempting to intimidate its government into abandoning audits or legal actions against his personal businesses, part of an ugly and unconstitutional pattern of exploiting public office for personal gain that mirrors the behavior that led to his impeachment— twice— and reinforces the perception of Trump as a grifter-in-chief who sees the presidency as a tool for profit and revenge.
As we saw yesterday, Trump’s threats to violate the 1979 Torrijos-Carter Treaties that returned the Panama Canal to Panama demonstrate not just ignorance of international law but also a dangerous contempt for it. His statements suggest either a failure to understand the legal framework governing U.S.-Panama relations or a belief that treaties and agreements can simply be bulldozed through brute force— a typically authoritarian impulse. Such recklessness alienates allies, destabilizes global markets, and reduces U.S. credibility abroad. Threatening to take back the Panama Canal— an act that would require military force— evokes the behavior of dictators, not democratic leaders. Trump’s rhetoric mirrors that of autocrats like Putin, who manufacture crises to justify aggression and consolidate power. By framing the Panama issue in hyper-nationalistic terms, Trump is signaling his willingness to disregard international norms and escalate conflicts to suit his political agenda.
His erratic foreign policy isolates the U.S. from its allies and makes us look unreliable and unstable. His threats against Panama, a long-standing partner, send a chilling message to other allies: America can’t be trusted. This not only weakens alliances but also emboldens adversaries like China and Russia, who exploit U.S. missteps to expand their influence. His idiotically bellicose rhetoric increases the risk of conflict, even in situations where diplomacy could easily prevail. By threatening Panama over canal fees, he’s manufacturing a crisis where none existed— raising the specter of unnecessary military involvement. Given his past flirtations with using military force for personal purposes, there’s every reason to believe he could push the U.S. into an unwinnable quagmire to save face or punish critics. His ongoing legal battles underscore his transactional view of governance. Once he takes office, he will use the presidency to obstruct investigations, pressure foreign governments, and extract personal benefits— much as he did with Ukraine. The Panama case suggests a blueprint for how he can be expected to intertwine foreign policy with personal financial grievances, making U.S. diplomacy little more than a tool for settling scores and enriching himself— in other words, weaponizing the presidency for personal gain. By openly threatening to renege on treaties, he’s further reinforcing a broader culture of lawlessness— both at home and abroad. His disdain for legal norms emboldens other leaders to flout international agreements, accelerating global instability. Domestically, his actions fuel the erosion of democratic values, encouraging corruption and undermining faith in the rule of law.
Some of his most repulsive worst traits— narcissism, corruption, ignorance and authoritarianism— are already on full display, rolled into one dangerous moment. A scumbag like Trump who views the presidency as a platform for grievance-settling and profit-making cannot be trusted to act in the nation’s interest. If Congress had a whit of institutional dignity or self-respect— the members do not— he would be impeached during the same week he’s inaugurated.
As Ron Brownstein warned yesterday, Trump will return to office facing far fewer constraints than when he entered the White House in 2017. The political, legal, institutional and civic forces that restrained and often frustrated Trump during his first term have all palpably weakened. That will be a mixed blessing for him and for the Republican Party. There’s less chance that forces inside or outside his administration will thwart Trump’s marquee campaign proposals, such as mass deportation of undocumented workers, big tariffs on imports, and sweeping rollbacks of climate and other environmental regulations. But there will also be fewer obstacles to the kind of polarizing ideas that got stopped during Trump’s first term. On numerous occasions, his own aides intervened to prevent the president from, for example, deploying the military to shoot racial-justice protesters, firing missiles into Mexico against drug-cartel facilities without authorization from the Mexican government, or potentially quitting NATO. Republicans in Congress thwarted parts of his agenda, as when senators [one Senator, now dead] blocked his attempt to repeal the Affordable Care Act. The courts ruled against some policies, such as separating the children of undocumented migrants from their parents at the southern border.”
[I]f an unbound Trump veers in directions that too many voters don’t want to follow— including vaccine skepticism, politicizing the criminal-justice system against his opponents, and the separation of undocumented parents from their U.S.-citizen children— he could quickly shrink his coalition again. And if his economic agenda rekindles inflation, as many independent analysis’s forecast, that effect will only be stronger.
…In his first term, Trump felt compelled to appoint several top aides with roots in more traditional GOP factions, particularly for national-security posts (such as James Mattis as defense secretary and John Kelly at the Department of Homeland Security). Having effectively crushed all other power centers in the GOP, Trump this time is naming loyalists up and down the government, daring Republican senators to oppose even his most extravagantly contrarian selections. The senior officials in Trump’s first term who had roots outside the MAGA movement resisted some of his most combustible ideas. Despite the influence of susie Wiles, a more conventional GOP operative, as his White House chief of staff, Trump’s new Cabinet appointees are unlikely to push back nearly as much. The second Trump administration could be less divided than the first, but could as a result be even more divisive.
… Trump returns with a solid majority of six Republican-appointed [Supreme Court] justices. They already issued a ruling in their last term to make Trump virtually immune from criminal prosecution for his actions in office, removing that potential constraint. And that majority has repeatedly proved willing to override long-standing precedent to advance conservative causes and circumscribe the authority of federal regulators, assisting another Trump-team priority. Court-watchers caution that the way justices rule on any given case is not always predictable, but few legal experts expect this majority to obstruct many of Trump’s plans.
…Even elected Democrats have been more muted. Last time, Democrats were pressed into full-scale opposition by an energized resistance movement that began with the huge women’s march against Trump the day after he took office and rarely slackened over his first four years. This year, after Trump won the popular vote for the first time in three tries, the liberal grass roots appear numbed and uncertain how to respond. Congressional Democrats in turn have mostly kept their heads down and spoken out relatively little, even about Trump’s most provocative Cabinet nominations. Likewise, Democrats— including Biden himself and leaders in the Capitol— have mostly stayed in the background while Republicans have torn themselves apart over a failed deal to prevent government shutdown.
“I don’t think it’s uncertainty [about how to respond to Trump’s victory], so much as a belief that the activist resistance opposition to Trump was misguided, and that it created an activist agenda that created problems for the party,” Stanley Greenberg, the longtime Democratic pollster, told me. Behind the relative quiescence is “a determination that elected officials [rather than activists] should get back in charge of figuring out the direction of the party.”
One reason Democrats haven’t focused more fire yet on Trump, Greenberg said, is that many of them recognize how much work they face to repair their own party’s image after an election showing that many voters considered it more focused on niche social and cultural issues than the economic fortunes of ordinary families. Elected Democrats are conscious of a need to express “respect for the working-class vote that he won,” Greenberg said. “A majority of this country is working-class: He won them… It is a different starting point.”
…This time, the hard-liners in the GOP do not plan on being frustrated. Prominent MAGA acolytes such as the designated White House deputy chief of staff, Stephen Miller, and Trump’s cheerleader in chief, Stephen Bannon, are updating the cry of conservatives a generation ago to “Let Trump be Trump.” With the guardrails so weakened, they see a generational chance to remake American life.
That expansive vision of radical change could quickly lead to a backlash. Blanket pardons for January 6 rioters, restricting access to abortion medication, deporting long-residing undocumented immigrants without any criminal record— possibly along with their U.S.-citizen children— are all policies that poll poorly. If Trump’s health appointees, led by Robert F. Kennedy Jr., his choice as secretary of Health and Human Services, undermine school vaccine compliance in a way that triggers outbreaks of childhood diseases, the outrage could be intense. “If we have a resurgence of measles epidemics, a resurgence of polio, a resurgence of tooth decay, that’s going to have a whale of an impact on people,” the Republican pollster Whit Ayres told me. (Ayres believes that Republican senators would actually do Trump a favor if they reject such nominees as RFK Jr. “who are going to do nothing but create problems for him over the next four years.”)
Any such controversies could chip away at Trump’s public support. But just as during the campaign, Trump’s political standing in office will likely be determined mostly by voters’ assessment of his impact on the economy and their personal finances. The exit polls conducted by Edison Research and the AP VoteCast survey both Mande clear that many voters who harbored doubts about Trump’s character or agenda voted for him anyway because they thought he would be better for their pocketbook.
If that pattern holds, many voters may look past actions they dislike, as long as they believe that Trump is delivering them greater economic stability. “Voters will forgive a lot if the country is doing well,” Davis told me. Greenberg and some other Democratic strategists concur. That explains why some Democrats are urging the party to pull back from their approach during Trump’s first term— generalized resistance on many fronts— and concentrate on making him accountable for one big thing. They want the party to highlight the contradictions that will surely emerge between Trump’s pledge of widely shared prosperity and a policy agenda that could reignite inflation while benefiting principally the wealthiest individuals and big corporations.
“I know Elon Musk is interesting, but these voters who broke for Trump were not looking for the oligarchs to take charge, and they are,” Greenberg said.
The conundrum facing Democrats is that their chances in the 2026 and 2028 elections will likely rise the more Trump advances a maximalist MAGA agenda— but so will the damage he inflicts on a wide array of causes and constituencies that Democrats prize, not to mention the erosion he may cause to the rule of law and small-d democratic institutions.
“The very crass political answer is: Democrats benefit” in the long run from Trump’s stronger position “because Trump always goes too far when he is uninhibited,” Matt Bennett, the executive vice president for public affairs at Third Way, a centrist Democratic group, told me. “However, he is going to break things that are very hard to fix. And he is going to hurt people who are very vulnerable— whom my fellow Democrats and I are in this business to protect. So we can’t root for that.”
But with Republicans holding both congressional chambers and GOP-nominated justices controlling the Supreme Court, the uncomfortable reality is that what Democrats prefer doesn’t count for much. “I think in official Washington,” Bennett told me, “there’s a deep understanding of how few levers Democrats have to stop Trump.”