Panama Caves, Moves Away From China After Pressure From Trump
Panamanian President Jose Raul Mulino announced Sunday that the strategically vital nation will not would not renew its agreement with China’s Belt and Road Initiative after a meeting with U.S. Secretary of State Marco Rubio. President Donald Trump has long accused Panama of violating the terms of former President Carter’s treaty due to unfair canal fees and the nation’s growing relationship with China.
The President of Panama, José Raúl Mulino, vows NOT to renew the 2017 Chinese contracts on the Panama Canal that are part of the CCP’s Belt and Road Initiative. The contracts come up in one or two years, but could be even sooner.
A good strart!!
pic.twitter.com/rYuRlsLUl2— Charlie Kirk (@charliekirk11) February 2, 2025
After meeting with Rubio in Panama City, Mulino told reporters that the agreement is due for renewal in a year or two. The Panamanian president added that he will study “whether it can be finished earlier or not.”
The announcement provides a massive blow to China’s influence in the Western Hemisphere, as Panama will be the first Latin American nation to lead the Belt and Road Initiative. The ambitious Chinese project has long been aimed at reestablishing the Silk Road, a network of trading routes between the East and the West. Beijing builds infrastructure in nations that sign on, oftentimes giving the Chinese government control over the economies and national security interests of developing nations.
Chinese businesses operate ports near the Panama Canal, while Panama was the first Latin American nation to join the Belt and Road Initiative. The canal was built and operated by the U.S. until 1999, when it was transferred to Panama under a treaty negotiated by former President Jimmy Carter in the late 1970’s.
During the highly anticipated meeting, Rubio warned Mulino that China’s presence in Panama represented a threat to the waterway and violates the terms of the Panama Canal treaty. “Secretary Rubio made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the Treaty,” State Department spokesperson Tammy Bruce told Reuters.
President Trump has stated that the U.S. will move to retake control of the Panama Canal if treaty violations are not addressed. “The Panama Canal is considered a VITAL National Asset for the United States, due to its critical role to America’s Economy and National Security. A secure Panama Canal is crucial for U.S. Commerce, and rapid deployment of the Navy, from the Atlantic to the Pacific, and drastically cuts shipping times to U.S. ports. The United States is the Number One user of the Canal, with over 70 percent of all transits heading to, or from, U.S. ports,” Trump wrote in a Truth Social post shortly after winning re-election in November.
“It was likewise not given for Panama to charge the United States, its Navy, and corporations, doing business within our Country, exorbitant prices and rates of passage. Our Navy and Commerce have been treated in a very unfair and injudicious way. The fees being charged by Panama are ridiculous, especially knowing the extraordinary generosity that has been bestowed to Panama by the U.S. This complete ‘rip-off’ of our Country will immediately stop,” Trump’s post continued.
The Panama Canal’s tolls can range from from three to six figures depending on the size of the ship looking to pass and the amount of cargo it is carrying. On the higher end of the spectrum, ships can be charged upwards of $500,000.
Trump has not ruled out the possibility of using military force if Panama does not end its relationship with the Chinese Communist Party.
