U.S. Pressures Panama Over Chinese Influence in Canal Zone
U.S. Secretary of State Marco Rubio delivered a firm message to Panamanian President José Raúl Mulino, emphasizing concerns over Chinese influence in the Panama Canal area. The United States views the Chinese presence, primarily through the Belt and Road Initiative, as worrisome for the strategic waterway.
In response, President Mulino announced the end of ties with China's investment program, stating:
"The 2017 Memorandum of Understanding on the Belt and Road Initiative will not be renewed by my government."
Mulino emphasized Panama's sovereignty over the canal, clarifying it isn't subject to negotiation. This decision followed warnings of potential tariffs and the possibility of U.S. military force from the Trump administration.
Rubio reiterated in a meeting, "This status quo is unacceptable." The administration expressed concern that Chinese businesses could manipulate the canal, potentially blocking access to U.S. ships during conflicts. Trump stated, "China is running the Panama Canal…and we're going to take it back, or something very powerful is going to happen."
Mulino's public announcement was measured and aimed at balancing Panama's interests against international pressures. By choosing to strengthen ties with the United States and consider further U.S. investments, Mulino aimed to reinforce sovereignty and maintain Panama's strategic autonomy.
Although Rubio's visit was described as "respectful and positive," tension remained evident. Mulino clarified, "I do not feel there is real threat of using force," referencing the treaty that offers some reassurance about the canal's neutral operation.

Diplomatic Tensions Rise Over Panama Canal Control
The diplomatic landscape between the U.S. and Panama became more complex with Rubio's recent trip, highlighting tensions over China's reach in the region. Rubio's visit emphasized the Trump administration's stance on limiting Chinese influence, particularly concerning the Panama Canal—a critical conduit for international maritime trade.
The canal's history of U.S. control, which ended with its transfer to Panama in 1999, complicates current diplomatic dynamics. The possibility of returning to American oversight provokes strong reactions within Panama. Citizens expressed fears of foreign intervention reminiscent of earlier eras through protests in Panama City.
Panama's decision to not renew its agreement with China's Belt and Road Initiative indicates a move to:
- Avoid American-imposed tariffs
- Maintain favor with Washington
- Potentially open new pathways for U.S. investment
Yet, the decision is also a double-edged sword, prompting closer scrutiny of Sino-Panamanian ties. Mulino's administration faces the challenge of negotiating these waters, balancing national pride with economic pragmatism.
As the situation evolves, we must ask: How will this decision impact Panama's economic future? Will other Latin American countries follow suit?

Implications for Regional Dynamics and Chinese Influence
Panama's withdrawal from China's Belt and Road Initiative impacts Beijing's regional infrastructure strategy, potentially slowing efforts to deepen Chinese influence in Latin America. This move suggests a recalibration of priorities by Latin American nations that have courted Chinese investments, especially as Washington's pressure intensifies.
Economically, Panama's withdrawal indicates a cautious approach by countries wary of becoming over-leveraged amid the massive financial scope of this initiative. The Belt and Road Initiative has often been criticized for creating debt dependencies. This shift could potentially stall Chinese infrastructure projects not only in Panama but also in neighboring countries.
Strategically, the impact on China's relations in the region could lead to a reevaluation by other Latin American nations. With the United States setting a hardline stance, Mexico's recent concessions over U.S. tariffs reflect a broader regional alignment that prioritizes economic ties with the U.S. These developments may compel China to reassess its approach, adapting to new dynamics where economic partnerships align more closely with geopolitical realities.
Panama's actions could bring about a reconfiguration of alliances. Faced with the prospect of aggravated trade tensions, Latin American countries may increasingly view the U.S. as a predictable partner with long-standing economic ties, despite the allure of Chinese infrastructure investments.
Key questions emerge:
- Will this shift lead to a strengthening of the Monroe Doctrine in practice?
- How might this impact the economic development of Latin American nations in the long term?

- Bruce T. State Department Readout of Secretary Rubio's Meeting with Panamanian President Mulino. U.S. Department of State. 2025.
- Cabrera E. Interview on U.S.-Panama relations. BBC News. 2025.
- Trump D. Press Conference at Mar-a-Lago. The White House. 2025.
- Mulino JR. Press Conference on Panama-U.S. Relations. Office of the President of Panama. 2025.
- Rubio M. Interview on The Megyn Kelly Show. Sirius XM. 2025.