Panama Denounces U.S. Claims About Panama Canal Deal

PANAMA CITY – Panama's President José Raúl Mulino has vehemently rejected U.S. claims that the country agreed to allow U.S. government vessels to transit the Panama Canal free of charge, calling the allegation a “quite simply intolerable falsehood.”

The U.S. State Department made the claim late Wednesday, suggesting that the deal would save Washington millions of dollars annually. However, the Panama Canal Authority quickly denied the assertion, stating that no changes had been made to the canal’s tolls or exemptions.

The controversy comes amid rising tensions between the U.S. and Panama, fueled by former President Donald Trump’s recent pledge to “take back” control of the canal, further straining diplomatic relations and causing concern across Latin America.

Panama Rejects U.S. Claims on Canal Deal Amid Rising Tensions

PANAMA CITY – President José Raúl Mulino has strongly denied U.S. claims that Panama agreed to allow U.S. government vessels to pass through the Panama Canal free of charge, calling the assertion a “quite simply intolerable falsehood.” Speaking to reporters on Thursday, Mulino expressed his surprise, emphasizing that the U.S. State Department's statement was based on incorrect information.

Mulino also confirmed that he was scheduled to speak with former President Donald Trump by phone on Friday. The dispute erupted just days after Trump reiterated his unfounded claim that the U.S. had “foolishly” ceded control of the U.S.-built canal to Panama in 1999, only for it to be taken over by China. “We’re going to take it back, or something very powerful is going to happen,” Trump warned on Sunday.

As Trump made his remarks, U.S. Secretary of State Marco Rubio delivered a similar message to Mulino during his visit to Panama as part of a Latin America tour. According to the State Department, Rubio told Mulino that Trump viewed China's influence over the canal as a significant threat and deemed it “unacceptable.” Rubio added that, without immediate changes, the U.S. would take the necessary measures to protect its rights.

In response, Rubio defended the U.S. stance on Thursday, arguing that the U.S. has a treaty obligation to protect the Panama Canal in the event of an attack, with U.S. military forces, particularly the Navy, required to enforce it. He expressed concern over paying tolls for a zone that the U.S. is obligated to defend during conflict.

Although the possibility of U.S. military action to reclaim the canal is seen as unlikely by most analysts, the 1989 invasion of Panama by the U.S. to depose dictator Manuel Noriega demonstrates that such a scenario, while improbable, cannot be entirely ruled out.

Trump's Rhetoric Aims to Counter China’s Growing Influence in Latin America

WASHINGTON – Former President Donald Trump’s recent remarks about the Panama Canal and his broader rhetoric seem aimed at pressuring Panama, and other countries in Latin America and the Caribbean, to curb China's increasing economic influence in the region—a region long seen as the U.S.'s sphere of influence. Over the past 25 years, Beijing’s presence in Latin America has expanded significantly, with China now surpassing the U.S. as South America’s largest trading partner.

Trump’s anti-China strategy appears to be having some effect. On Thursday, Panama’s president José Raúl Mulino announced that Panama had informed Chinese diplomats that it would be ending its participation in China’s ambitious “Belt and Road” initiative. The trillion-dollar-plus development plan aims to enhance global economic growth by building infrastructure worldwide, including railways in Thailand and Ethiopia and a massive “mega port” in Peru, all while strengthening China’s geopolitical influence.

On Wednesday, China’s foreign ministry spokesperson, Lin Jian, condemned the U.S. for making “irresponsible remarks” regarding the Panama Canal, accusing Washington of distorting and misrepresenting Panama’s cooperation with Beijing. Lin emphasized that the “Belt and Road” initiative had yielded “fruitful outcomes” for Panama and China, suggesting that the U.S. was trying to undermine Panama's relations with Beijing.

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