Panama pledges to end key canal deal with China, work with US after Rubio visit

Panama Ends Key Deal with China, Vows Closer Ties with US

Panama’s President, José Raúl Mulino, announced Sunday that his country would not renew a critical development deal with China, following pressure from President Donald Trump and after a meeting with Secretary of State Marco Rubio. The agreement, part of China’s Belt and Road Initiative, had raised concerns over Panama’s sovereignty over its vital 51-mile shipping canal.

Mulino emphasized that Panama’s control over the Panama Canal, linking the Pacific Ocean and Caribbean Sea, would remain intact. The president revealed plans to strengthen ties with the U.S., aiming to attract more American investment.

“This visit opens the door to build new relations and expand U.S. investments in Panama,” Mulino said after his meeting with Rubio, marking the Secretary of State’s first international trip since his confirmation.

Rubio Calls for U.S. to Repurchase Panama Canal During Visit

In his first international trip as Secretary of State, Marco Rubio met with the U.S. Embassy team in Panama, praising their efforts in supporting President Trump’s vision of an America First foreign policy. In a post on X, Rubio expressed his appreciation for the embassy team and highlighted the importance of strengthening U.S.-Panama relations.

During his visit, Rubio made clear the U.S. government’s stance on the Panama Canal, asserting, "The United States cannot, and will not, allow the Chinese Communist Party to continue with its effective and growing control over the Panama Canal area."

President Trump has repeatedly expressed concern about China’s increasing control over the strategic waterway, particularly as China charges U.S. ships significant premiums to cross the canal. The Panama Canal, built by the U.S. and completed in 1914, was handed over to Panama during the Carter administration. Since then, Trump has made regaining U.S. control over the canal a priority of his administration.

In response to Trump’s concerns, House Republicans introduced the Panama Canal Repurchase Act, a bill that seeks to authorize the U.S. government to negotiate with Panama to repurchase the canal. Rep. Dusty Johnson, R-S.D., a key sponsor of the bill and a member of the Select Committee on China and the House Transportation and Infrastructure Committee, supported the move, stating, "President Trump is right to consider repurchasing the Panama Canal. China’s interest in and presence around the canal is a cause for concern. America must project strength abroad, and owning and operating the Panama Canal might be an important step towards a stronger America and a more secure globe."

If passed, the bill would grant the U.S. president the authority to act in coordination with the Secretary of State to initiate and conduct negotiations with Panama to reacquire the canal. The U.S. Department of State estimates that around 72% of the vessels that travel through the canal are from or destined for U.S. ports.

The canal is also of significant strategic importance to the U.S., as it serves as a vital transit point for U.S. Coast Guard and Department of Defense vessels. Without access to the canal, ships would have to take an 8,000-mile detour around South America.

"More than 10,000 ships use the Panama Canal each year, generating billions of dollars in tolls that would economically benefit America," said Johnson’s office, underlining the economic advantages of U.S. ownership.

In addition to addressing China’s role in the region, Rubio also discussed other pressing issues, including efforts to end the hemisphere’s mass migration crisis and ensuring fair competition for U.S. firms operating in Panama.

Cruz Warns of China's Growing Influence on Panama Canal and U.S. National Security Risks

Sen. Ted Cruz raised alarms about China’s growing influence over the Panama Canal, claiming it poses "acute risks" to U.S. national security. During a Senate Commerce, Science & Transportation Committee hearing, Cruz warned that the Chinese Communist Party (CCP) is taking a "militaristic interest" in the vital waterway that connects the Pacific Ocean and Caribbean Sea. He specifically cited China's involvement in building a bridge across the canal and controlling container ports at either end, which he claimed could allow China to block the passage at will.

"Chinese companies are building a bridge across the canal at a slow pace, taking nearly a decade, and controlling the ports at either end. This gives China the ability to block the canal without warning, creating a significant national security risk," Cruz said, emphasizing that U.S. national security is increasingly vulnerable due to this situation.

Cruz also pointed out the exorbitant costs U.S. ships face for transiting the canal, especially warships, which pay additional fees. The Panama Canal generates profits exceeding $3 billion annually, which Cruz said ultimately burden American taxpayers and consumers due to higher costs for goods.

The remarks from Cruz come as Secretary of State Marco Rubio prepares for his first international trip to Panama, where he will discuss matters of trade and foreign influence. Rubio's visit follows Trump’s recent comments about China’s role in operating the canal, claiming, "China is operating the Panama Canal, and we didn’t give it to China, we gave it to Panama, and we’re taking it back."

Panama's President José Raúl Mulino denied any Chinese interference, stating, "There is no presence of any nation in the world that interferes with our administration." However, Louis Sola, Chairman of the Federal Maritime Commission, testified that China’s influence in Panama has increased significantly since 2015, citing Panama’s membership in China’s Belt and Road Initiative and its decision to sever ties with Taiwan.

Sola also noted that Chinese companies have been awarded numerous development contracts in Panama, some of which are directly adjacent to the canal. Many of these contracts were awarded without competitive bidding, raising concerns about the lack of transparency and potential for exploitation of Panama’s resources. Sola also mentioned that many of these Chinese companies are state-owned and some have links to the People’s Liberation Army.

The growing Chinese presence in the region, particularly within Panama, has raised alarms for U.S. lawmakers, with Cruz urging the government to address the escalating Chinese influence across the Americas, particularly in Panama.

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