- Panama became the first Latin American country to exit China’s Belt and Road Initiative in February 2025.
- The decision followed U.S. pressure over China’s influence on the Panama Canal.
- The canal remains critical for global trade and U.S. security interests.
- China expressed regret but continues investing in Latin America.
- The U.S. may push other countries to reconsider BRI ties, but China’s regional presence remains strong.
In February 2025, Panamanian President José Raúl Mulino announced the country’s withdrawal from China’s Belt and Road Initiative (BRI), making Panama the first Latin American nation to do so. This decision followed a meeting with U.S. Secretary of State Marco Rubio, during which concerns about China’s growing influence in the Western Hemisphere, particularly regarding the Panama Canal, were discussed, ThinkChina reported.
U.S. Concerns Over Chinese Influence
The United States has expressed apprehension about China’s expanding presence in Panama, especially through Hong Kong-based CK Hutchison Holdings’ operations of ports at both ends of the Panama Canal. While CK Hutchison is a private conglomerate with significant Western investments, U.S. officials fear that China’s influence could pose strategic risks, potentially affecting the canal’s operations and U.S. national security.
Panama’s Strategic Importance
The Panama Canal is a crucial conduit for global maritime trade, handling approximately 6% of worldwide shipping. Its strategic location connects the Atlantic and Pacific Oceans, making it vital for international commerce and U.S. military logistics. The U.S. remains Panama’s largest trading partner and foreign investor, underscoring the canal’s significance to American economic and security interests.
China’s Response and Regional Implications
China has expressed regret over Panama’s decision to exit the BRI, emphasizing the initiative’s benefits for participating countries. Despite this setback, China’s investments in Latin America remain substantial, with projects like Peru’s Chancay Port highlighting its ongoing regional engagement. The U.S. aims to counter China’s influence by encouraging other nations to reconsider their BRI participation; however, many countries may find it challenging to disengage due to their deep economic ties with China.
Panama’s withdrawal from the BRI reflects the complex dynamics of U.S.-China competition in Latin America. While the U.S. has successfully persuaded Panama to realign its foreign policy, replicating this outcome elsewhere may prove difficult, given China’s entrenched economic relationships throughout the region.
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Source: ThinkChina
