- Mulino Denies Making Commitments on Behalf of the Panama Canal Authority.
- US Warns of Consequences if China’s Influence is Not Reduced.
- Trump Threatens to ‘Take Back the Panama Canal’.
According to Bloomberg, US officials reported that Panama guaranteed free transit for US warships through the canal. These claims suggest that Panamanian President José Raúl Mulino assured US Secretary of State Marco Rubio of this measure during their meeting on Sunday, February 2, reports Newsroom Panama.
US Pressures Panama Over Alleged Chinese Influence
Mulino later stated that he “could not speak for the Panama Canal Authority (ACP).” The ACP acknowledged that it would work with the US Navy to “optimize the priority” of its ships passing through the canal but has yet to issue an official statement to local or international media. During his visit, Rubio warned that the US would take “the necessary measures to protect its rights” if Panama did not reduce China’s influence over the canal. Mulino downplayed the tensions, stating that he “does not perceive a real threat against the treaty or the use of military force.”
Hours later, US President Donald Trump reiterated his stance, saying, “It was handed over to Panama, but they violated the agreement… I don’t think the troops are needed in Panama. What Panama has done is terrible for the financial security of this part of the world.” Trump further warned that the US would “take back the Panama Canal” or that “something very powerful will happen.”
US Demands Action on Chinese-Controlled Ports
Rubio told Mulino that the US expects a reduction in China’s influence over the canal, as Trump believes China poses “a threat” and has violated the treaty ensuring the canal’s neutrality. State Department spokesperson Tammy Bruce reinforced this message, stating that if Panama did not act, the US would “take measures necessary to protect its rights under the Treaty.”
A significant concern is the two ports at each end of the canal, operated by Hutchison Ports, a subsidiary of Hong Kong-listed CK Hutchison Holdings. These port concessions were renewed in 2021 for another 25 years without any form of competitive bidding and have caught the attention of US officials. Mulino recognized the US concerns and declared an audit of the port concessions, which account for almost 40% of the market. Speculation in Panama is that these contracts might be cancelled, though it is not clear whether this would be enough to appease Trump, who has also lambasted canal fees as “a complete rip-off.”
Local Backlash and Panama’s Response
In an apparent move to soothe US concerns, Mulino announced that Panama would not be renewing participation in China’s Belt and Road Initiative (BRI), but he did not give an expiration date. Panama originally joined the BRI in 2017 after it switched diplomatic recognition from Taiwan to China.
Despite these concessions, tension remains high. Yesterday, some 200 protesters marched through Panama City waving national flags and singing anti-American slogans, including “Marco Rubio out of Panama.” Some burned a banner featuring Trump and Rubio, the AP reported.
China’s Growing Investments in Panama
Chinese state-controlled companies have invested in Panama through various infrastructure projects, such as a large convention centre near the canal, a new bridge over the waterway, and a cruise ship port. All these were acquired through bidding processes, but US officials have raised concerns over China’s growing economic footprint in the region.
A highly contentious plan to construct a large Chinese embassy near the canal was ultimately rejected after US opposition.
Migration and Economic Cooperation
Rubio welcomed Panama’s efforts to stem illegal migration, telling Mulino and Panamanian Foreign Minister Javier Martínez-Acha that the number of migrants crossing the Darién jungle between Panama and Colombia had fallen by 94% from the previous year.
The other US interest expressed by Bruce includes an “improved investment climate” in Panama, ensuring “a level playing field for fair competition by US firms.” At this time of renewed strain on US-Panama relations, the future of the neutrality of the Panama Canal and China’s role in it is a pivotal question in the geopolitical landscape of the region.
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Source: Newsroom Panama
