Panama Rejects China Pact Amid US Pressure and Canal Tensions
Panama withdraws from China's Belt and Road Initiative amid US pressure, as Trump warns of action over alleged violations of the canal treaty.
Panama Rejects China’s Belt and Road Initiative Amid US Pressure as Trump Warns of Action Over Panama Canal Control
Panama has officially declared that it will not renew its 2017 agreement to participate in China’s Belt and Road Initiative (BRI), a significant geopolitical shift in response to pressure from the United States. President Jose Raul Mulino’s decision follows mounting warnings from US President Donald Trump, who has repeatedly threatened to reassert American control over the strategically vital Panama Canal.
It was reportedly during a high-stakes meeting between Mulino and US Secretary of State Marco Rubio when the decision was made. According to sources, Rubio urged Panama to reduce Chinese influence over the canal, cautioning that inaction could be met with possible US retaliation. Mulino dismissed the conversation as there was “no real threat of retaking the canal or the use of force,” but his later words suggest that the pressure campaign led by Trump has indeed made some difference.
“I think this visit opens the door to build new relations and try to increase as much as possible US investments in Panama,” Mulino stated. While asserting that Panama’s sovereignty is not up for negotiation, his administration’s willingness to audit Chinese-linked businesses operating around the canal signals a shift in Panama’s stance.
Trump’s Warning: ‘Something Very Powerful Will Happen’
The leadership of US President Donald Trump is not amused by the current management of the Panama Canal, alleging that the whole venture is a violation of the original agreement under which the US transferred control of the canal to Panama in 1999.
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Speaking to reporters, Trump described the handover of the canal as a mistake and issued a stern warning: “Something very powerful is going to happen if it is not handed over to the US.” He also accused Panama of breaking its commitments and allowing China to gain the upper hand over the waterway.
“What they have done is terrible. They violated the agreement. China is running the Panama Canal. It was not given to China, it was given to Panama. But they violated the agreement, and we’re gonna take it back or something very powerful is going to happen,” Trump declared.
Even before assuming office, Trump had consistently signaled that he viewed the Panama Canal as an issue of national security. His administration argues that China’s deepening influence in Panama, especially in the BRI, has, in effect, fully eroded the canal’s neutrality, a vital passage for global trade. The US government has said that in it will do its utmost to defend its interests and, as per the 1977 treaty, including military intervention if a foreign power has compromised the canal.
Panama Agrees to Scrutinize Chinese-Linked Operations
The Panamanian government has launched an audit of a Chinese-affiliated company operating two major terminals close to the canal in response to US concerns. President Mulino confirmed that an investigation is underway into Panama Ports Company, a subsidiary of the Hong Kong-based conglomerate CK Hutchison Holdings.
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We will have to wait until that audit is done and until we arrive at our legal conclusions, whereafter we shall take action, of course,” said Mulino, signaling possible regulatory actions against Chinese companies to follow.
Meanwhile, public anger over US interference in Panama has turned into demonstrations. About 200 protesters rallied in the streets, waving national flags and shouting slogans like “Marco Rubio out of Panama” and “Long live national sovereignty.” Some protesters burned banners with images of Donald Trump and Rubio before riot police prevented them near the presidential palace.
Tensions are flared as the future of Panama and its prized waterway come into question amid the high-stakes geopolitical tug-of-war unfolding between the United States and China.
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