US President-elect Donald Trump has demanded that Panama reduce its canal fees for American ships or face calls to return the Panama Canal to US control.

Addressing a crowd of supporters in Arizona, Trump criticized Panama’s pricing policies as “exorbitant” and “highly unfair,” claiming they impose an undue burden on American shipping and naval operations.

“The fees being charged by Panama are ridiculous, highly unfair,” Trump remarked during the event, which was organized by Turning Point USA, a conservative activist group that played a pivotal role in his successful 2024 campaign.

Trump’s comments have sparked diplomatic tension, with Panamanian President José Raúl Mulino swiftly rejecting the demand, stating that Panama’s sovereignty over the canal is “non-negotiable.”

Mulino emphasized that “every square meter” of the canal belongs to Panama, highlighting the nation’s hard-earned independence in managing the vital waterway.

Who owns the Panama Canal?

Trump’s rhetoric marks a rare instance of a US leader suggesting a potential territorial demand. While he did not specify how such a transfer would be achieved, his statements suggest a dramatic shift in US foreign policy under his administration.

The Panama Canal, a crucial link between the Atlantic and Pacific Oceans, was built by the United States in the early 20th century and remained under US control until 1999, following a phased handover agreement signed in 1977.

Trump described the canal as a “vital national asset” and hinted at aggressive measures should Panama fail to lower shipping fees.

“If shipping rates are not lowered,” he said, “we will demand that the Panama Canal be returned to us, in full, quickly and without question.”

The canal remains an economic lifeline for global trade, accommodating around 14,000 ships annually. Its strategic importance for US military and commercial interests has long been acknowledged, but Panama has fiercely guarded its autonomy over the waterway since gaining full control.

Trump’s fiery rhetoric drew sharp rebukes from Panama and raised eyebrows globally.

Trump’s warnings: is he serious?

Trump’s remarks also underscore his broader stance on trade and international relations.

During the same speech, he criticized Canada and Mexico for “unfair trade practices” and accused them of allowing drugs and migrants to flow into the United States.

While he acknowledged Mexican President Claudia Sheinbaum as a “wonderful woman,” his comments hinted at a continuation of his combative trade policies from his previous administration.

The speech, delivered at Turning Point USA’s annual conference, echoed Trump’s signature campaign themes of immigration, crime, and foreign trade.

It also avoided recent controversies over government spending and debt ceiling negotiations, focusing instead on rallying his base and asserting his vision for American leadership.

While Trump’s statements may appeal to his supporters, they signal potential diplomatic challenges ahead as his administration prepares to take office.

With his inauguration set for January 20, the international community will be watching closely to see how these bold claims translate into policy.

As Trump continues to assert his America-first approach, the world may face a new era of US foreign relations characterized by economic nationalism and unorthodox diplomacy.

For now, Panama has made its position clear: the canal is not up for negotiation.

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As the global economy moves into 2025, the optimism of a post-pandemic recovery is fading.

While 2024 saw central banks easing interest rates and stock markets reaching record highs in the US and Europe, significant challenges loom large.

A burgeoning cost-of-living crisis, geopolitical tensions, and climate-related financial strain threaten to derail progress and complicate policymaking in the year ahead.

Economic uncertainty grows

Despite winning the inflation battle in 2024 without triggering a global recession, governments are now grappling with its aftermath.

The World Bank reports that the world’s poorest nations are in their worst economic state in two decades, exacerbated by missed opportunities during the post-pandemic recovery.

For wealthier nations, economic anxieties persist as trade dynamics shift under the threat of protectionist policies.

The re-election of Donald Trump in the United States could escalate tensions, with proposed import tariffs risking a global trade war.

These measures, designed to bolster domestic industries, may instead heighten inflationary pressures and hinder economic growth.

Unemployment rates—currently near historic lows—could rise as a result of disrupted supply chains and diminished international cooperation.

Geopolitical and climate crises fuel instability

The ongoing conflicts in Ukraine and the Middle East are worsening geopolitical uncertainty.

Europe faces its own challenges, with political stalemates in Germany and France undermining economic confidence.

These hurdles coincide with doubts about China’s economic resilience, as its growth slows and debt levels rise.

Climate change is another escalating concern. The financial toll of climate-related disasters is mounting, with nations worldwide struggling to fund mitigation and recovery efforts.

For developing economies already hampered by economic stagnation, climate damage compounds existing vulnerabilities.

Wealthier countries, too, are feeling the strain, with increased demand for infrastructure spending and insurance costs.

The cost-of-living crisis tests political leadership

The economic landscape has significant political implications. In 2024, voters punished incumbents globally—from the United States to South Africa—over the persistent cost-of-living crisis.

This trend reflects public frustration with wage stagnation and rising prices for essential goods and services.

Heading into 2025, governments must navigate these pressures while balancing fiscal responsibility and political survival.

For many households, economic conditions remain challenging.

Rising energy prices, driven in part by geopolitical instability, have further strained budgets.

The cumulative impact of these factors risks undermining consumer confidence and delaying recovery in key sectors.

Why 2025 matters

The stakes for 2025 are high. Without strategic intervention, the combination of economic headwinds, trade protectionism, and climate challenges could deepen global inequalities.

Wealthy nations must avoid isolating themselves through restrictive policies that harm global trade and investment flows.

Developing countries, meanwhile, need greater access to funding and trade opportunities to escape their current economic stagnation.

The global economy’s resilience depends on collaboration and adaptability.

Policymakers must prioritise sustainable growth, equitable trade agreements, and investment in green technologies.

The year ahead may prove pivotal in determining whether the global recovery gains momentum or stalls under the weight of its challenges.

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Despite rising geopolitical tensions, gold prices have been lacking bullish conviction, according to experts. 

Prices were little changed on Monday as the market tread cautiously in the wake of the Federal Reserve’s hawkish comments for 2025. 

Last week, prices had fallen sharply after the US Fed’s policy meeting, in which the central bank had signalled a slowdown in its rate-cutting cycle. 

However, slightly softer inflation data from the US limited losses in gold prices. 

The yellow metal had shed 1% last week after Fed officials projected fewer rate cuts in 2025 because of sticky inflation in the country. This had boosted the dollar and yields on Treasury bonds. 

“Given all the market shenanigans in the wake of last night’s Fed announcement, gold was never going to come out unscathed,” said David Morrison, senior market analyst at Trade Nation. 

The Fed’s declaration of a hawkish shift in rate cut expectations next year led to a significant ‘risk off’ move from speculators.

Softer PCE data

However, the core personal consumption expenditure index, which excludes volatile food and energy prices, rose 2.8% in November, below the expectation of 2.9%. 

Furthermore, personal income decelerated sharply from 0.7% in October and grew 0.3% last month. 

The annual PCE index rose to 2.4% in November compared with estimates of 2.5%. The index rose by 0.1% in November, slightly lower than the October’s increase of 0.2%. 

This provided some relief to gold prices as softer inflation could prompt the Fed to change its projection and cut interest rates more next year.

Geopolitical tensions

Russian President Vladimir Putin has pledged retaliation after Ukraine staged a major drone attack on the city of Kazan, which damaged residential buildings and shut down the airport.

Meanwhile, Israeli forces bombed the so-called “safe zone” in southern Gaza, causing tents to go up in flames and killing at least seven Palestinians, taking the death toll over the past day to at least 50.

“The US Dollar (USD) bulls remain on the defensive below a two-year high touched on Friday and turn out to be a key factor acting as a tailwind for the commodity, Haresh Menghani, editor at FXstreet, said in a report. 

“Apart from this, geopolitical risks stemming from the protracted Russia-Ukraine war and tensions in the Middle East further lend support to the safe-haven precious metal.”

Cautious approach by traders

The Fed’s hawkish tone for next year boosted the dollar last week. 

On Friday, the dollar had hit a two-year high and is currently hovering near that level. 

Higher interest rates make the greenback more attractive due to increased returns on dollar-denominated assets. 

A stronger dollar weighs on commodities such as gold as it makes the precious metal more expensive for overseas buyers. 

Furthermore, the Fed’s hawkish tone remained supportive of elevated US Treasury bond yields. 

“This, along with a generally positive tone around the equity markets, seems to cap gains for the non-yielding yellow metal,” Menghani added. 

He noted:

Hence, it will be prudent to wait for strong follow-through buying before positioning for any further appreciating move. 

The market will now wait for the release of the Conference Board’s Consumer Confidence index for further cues. 

Gold’s technical indicators

Gold prices have surpassed the immediate hurdle of $2,637 per ounce. The next resistance remains at $2,647 an ounce, which coincides with the downward-sloping 200-period simple moving average. 

“The latter should act as a key pivotal point, which if cleared decisively,  should pave the way for a further appreciating move,” Menghani said. 

On the lower side, the $2,616-$2,615 per ounce are the immediate support for prices. 

If prices fall below this level, then the next support remains at the $2,600 per ounce level. 

“Some follow-through selling will be seen as a fresh trigger for bears and set the stage for deeper losses in the near term,” Menghani said. 

At the time of writing, the February gold contract on COMEX was at $2,646.21 per ounce, largely unchanged from the previous session.

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In a fresh twist to the 1Malaysia Development Berhad (1MDB) scandal, the Malaysian state fund has launched a $1 billion legal claim against Amicorp Group and its CEO, Toine Knipping.

The claim, filed in the British Virgin Islands, accuses Amicorp of facilitating over $7 billion in fraudulent transactions between 2009 and 2014.

According to 1MDB, the corporate services provider played a critical role in the elaborate global money-laundering operation, which implicated high-ranking officials, including Malaysia’s former Prime Minister Najib Razak.

1MDB fraud case: allegations against Amicorp

The claim alleges that Amicorp Group and its CEO orchestrated a sophisticated network of fraudulent activities, using shell companies and sham transactions to obscure the origins and final destinations of billions of dollars.

These schemes reportedly involved jurisdictions such as Singapore, Barbados, Curaçao, Hong Kong, and the British Virgin Islands, enabling the systematic siphoning of funds.

Amicorp is accused of knowingly facilitating fraudulent transactions by creating complex financial structures.

These arrangements purportedly allowed massive sums intended for Malaysian public use to be diverted into private accounts.

The legal claim describes Amicorp’s alleged role as pivotal in enabling the conspiracy to flourish over five years.

What does the 1MDB lawsuit seek to achieve?

Since its establishment in 2009, 1MDB has been at the center of a global corruption scandal that exposed systemic failures across multiple institutions.

Malaysian and US investigators previously estimated that $4.5 billion was stolen from the fund, implicating officials from Malaysia and global financial institutions such as Goldman Sachs.

Najib Razak, Malaysia’s former Prime Minister, is currently serving a prison sentence for his involvement.

However, he continues to deny wrongdoing.

This latest legal action against Amicorp Group highlights how key facilitators allegedly operated behind the scenes, creating layers of financial opacity that made the fraud difficult to detect.

The scandal’s international dimensions are stark, with funds traced through major financial hubs.

The lawsuit claims that Amicorp’s practices allowed these funds to travel undetected across jurisdictions, exacerbating the challenge of recovering stolen assets.

1MDB’s lawsuit seeks to hold Amicorp accountable for its alleged role in enabling the fraud.

By pursuing $1 billion in damages, the state fund aims to recover a portion of the estimated $7 billion in misappropriated funds.

This legal claim also underscores the systemic failures that allowed the 1MDB fraud to persist.

Financial oversight institutions worldwide have faced scrutiny for their role in enabling or failing to prevent the misuse of public funds.

The scandal has prompted stronger regulations and increased due diligence requirements in global financial services.

As the lawsuit unfolds, it could set a precedent for addressing corporate complicity in large-scale corruption.

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