Reagan Invokes Economic Powers Act

In response to escalating tensions and a domestic political crisis in Panama, the United States took significant economic measures against the Panamanian government led by Manuel Noriega. The situation intensified when Noriega was indicted in U.S. courts for drug trafficking, prompting the U.S. to freeze economic and military aid to Panama. In April 1988, President Reagan invoked the International Emergency Economic Powers Act, which allowed the U.S. government to take drastic actions against foreign entities posing a threat to national security. This invocation resulted in the freezing of Panamanian government assets held in U.S. banks, the withholding of fees for the use of the Panama Canal, and a prohibition on payments to the Noriega regime by U.S. agencies, firms, and individuals. These measures contributed to a state of turmoil within Panama, as the economy faced severe restrictions and the government struggled to maintain control amidst growing opposition and instability.