Panama cancels major canal agreement with China after Marco Rubio's visit

 February 3, 2025

In a pivotal shift in international alliances, Panamanian President José Raúl Mulino has announced the termination of a crucial agreement with China, choosing instead to fortify partnerships with the United States.

Fox News reported that Panama's strategic pivot was influenced by a meeting with U.S. Secretary of State Marco Rubio and mounting U.S. concerns over Chinese influence in the region.

The Panama Canal has long been a cornerstone of global maritime traffic. Completed by the United States in 1914, the canal was transferred to Panama during the Carter administration but remains of vital importance to world commerce and U.S. strategic interests.

Recently, President Donald Trump voiced apprehensions about China's increasing control over this critical waterway, which has been facilitated through engagements such as the Belt and Road Initiative.

With approximately 72% of vessels traversing the Panama Canal bound for or emanating from U.S. ports, the canal is not only a pivotal maritime route but also a significant asset to U.S. national security and economic agendas.

Reinforcing Ties with the U.S. Following Rubio's Visit

The decision to not renew the memorandum with China dates back to a crucial meeting held last Sunday between President Mulino and Secretary Rubio. This meeting marked a significant turn in Panama's foreign relations, as stated in Mulino's commitment to enhance U.S. investments and bilateral ties.

Rubio's visit was not solely focused on the canal, however. The discussions also covered broader issues like mitigating mass migration crises and ensuring fair competition for U.S. businesses operating abroad.

Rubio's emphasis on an "America First" policy during his visit underlined the U.S. administration's stance on foreign diplomatic engagements.

Rubio expressed satisfaction with his Panama visit, particularly the opportunity to meet with the U.S. Embassy staff and promote the U.S. government's foreign policy strategy, as highlighted in his social media interactions.

In response to China's growing influence near the Panama Canal, the U.S. has taken a proactive stance. Rubio, echoing Trump's concerns, stated on social media that the U.S. "cannot, and will not, allow the Chinese Communist Party to continue with its effective and growing control over the Panama Canal area."

This sentiment is bolstered by the strong views of House Representative Dusty Johnson, who emphasized the strategic and security imperatives of the U.S. maintaining or regaining control over the canal. According to Johnson, possessing the canal could be critical to ensuring global stability and reinforcing American strength abroad.

Trump's advocacy for reclaiming U.S. stewardship over the Panama Canal has spurred legislative motions, further echoing the sense of urgency in addressing China's regional ambitions.

Johnson's statements reflect a broader legislative consensus on the importance of U.S. presence and oversight in crucial international conduits.

Looking Forward: Panama's Geopolitical Pivot

As Panama realigns its foreign policies, the repercussions stretch far beyond the canal. This shift signifies a deeper U.S. involvement in Panamanian politics and economic activities, aiming to strengthen mutual interests and counteract Chinese influences in the Americas.

Mulino’s remarks about opening new doors for relations post-Rubio’s visit underscore a strategic recalibration towards more robust U.S. ties.

The focus appears to be on fostering economic growth through increased American investments and collaboration in various sectors, highlighted during these high-level discussions.

The unfolding developments in Panama depict a dynamic tableau of shifting international alliances. As the global community watches, the decisions made today will undoubtedly shape the geopolitical landscape of tomorrow, particularly in how major powers like the U.S. and China engage with strategic assets like the Panama Canal.

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