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Panama has announced that it will back out of their 2017 agreement with China’s Belt and Road Initiative (BRI), signaling a shift towards stronger ties with the United States.
Some shit you should know before you read: Over the last two weeks, President Trump has kicked up his rhetoric against Panama, accusing the country of allowing China to gain a foothold near the Panama Canal through ports operated by Chinese-linked companies. Trump has repeatedly claimed that China “controls” the canal and has warned that the US may be forced to “take it back” if Panama does not act to curb Beijing’s influence. At the center of Trump’s criticism is China’s Belt and Road Initiative (BRI), a global infrastructure program that Panama joined in 2017, which led to Chinese investment in key port facilities on both ends of the canal. These ports, operated by a subsidiary of Hong Kong-based CK Hutchison Holdings, do not control canal operations but handle logistics and shipping, a presence that Trump argues poses a national security threat.

What’s going on now: Following a visit by US Secretary of State Marco Rubio, Panama has announced that it will withdraw from its 2017 agreement with China’s Belt and Road Initiative (BRI) and seek stronger economic ties with the United States. Panamanian President José Raúl Mulino confirmed that his country would not renew the deal, even suggesting it could be terminated ahead of schedule. This move aligns Panama more closely with US interests and comes after mounting pressure from the Trump administration, which has accused China of expanding its influence near the Panama Canal through port operations. Mulino emphasized that while Panama is open to US investment in infrastructure projects, the sovereignty of the canal remains “nonnegotiable” and under full Panamanian control.
As part of its shift away from China, Panama has also launched an audit of CK Hutchison Holdings, the Hong Kong-based company that operates ports on both ends of the canal, to assess its role and potential security risks.
In addition to distancing itself from China, Panama has reportedly offered free passage through the Panama Canal for USS Navy ships, a significant concession after President Trump complained that the US Navy was being “overcharged” by Panama.
This all comes after Secretary Rubio reportedly warned Panamanian President José Raúl Mulino that if changes were not made to reduce China’s influence near the Panama Canal, the US would be forced to “protect its rights” under the neutrality treaty governing the waterway.