Panama to Terminate Major Canal Agreement with China Following Rubio’s Visit

Panama’s Shift in Maritime Alliances: A Response to U.S. Leadership

In a pivotal move, Panama’s president declared on Sunday the intention to end a significant development agreement with China. This announcement followed a visit from U.S. Secretary of State Marco Rubio and arose from rising concerns voiced by former President Donald Trump regarding Chinese control over the strategically vital Panama Canal.

Maintaining Sovereignty Over the Panama Canal

President José Raúl Mulino emphasized that Panama’s sovereignty over the 51-mile waterway, which connects the Pacific Ocean to the Caribbean Sea, is secure. However, he confirmed that the country would not renew the 2017 memorandum of understanding associated with China’s Belt and Road Initiative. Instead, Panama aims to foster closer ties with the United States, marking a significant pivot in its international relations.

Building New Partnerships with the U.S.

Following his discussion with Secretary Rubio, Mulino remarked, “This visit opens the door to build new relations and enhance U.S. investments in Panama.” Rubio, who previously served as a senator from Florida, expressed his commitment to advancing U.S. interests abroad.

Countering China’s Influence in Central America

Secretary Rubio articulated his resolve to limit Chinese influence in the region, tweeting, “The United States cannot and will not allow the Chinese Communist Party to maintain its growing control over the Panama Canal area.” This sentiment reflects broader concerns within the U.S. government regarding Chinese economic expansion in Latin America.

Historical Context: The Panama Canal’s Significance

The Panama Canal, completed in 1914, was initially constructed by the United States before being handed over to Panama during the Carter administration. In recent years, U.S. officials have raised alarm bells about China charging hefty tolls to American shipping companies using the canal. Trump has stated that reclaiming control of the canal is a priority for his administration.

Legislative Moves Towards Reacquisition

To address these growing concerns, House Republicans have introduced the Panama Canal Repurchase Act. The bill, spearheaded by Rep. Dusty Johnson from South Dakota, aims to authorize the president to negotiate with Panama’s government to potentially reacquire the canal. In a recent statement, Johnson asserted, “China’s interest in and presence around the canal is a cause for concern. The United States must project strength abroad—owning the Panama Canal could be a key step toward a more secure and powerful America.”

The Implications of Chinese Control

If passed, the legislation would empower the president to initiate negotiations to regain U.S. control over this strategic waterway, a critical supply route for international trade. Current estimates suggest that approximately 72% of the vessels traversing the canal are bound for U.S. ports, highlighting its importance to American maritime interests.

Economic Ramifications of the Panama Canal

According to estimates, the Panama Canal accommodates over 10,000 ships each year, generating billions of dollars in tolls that significantly contribute to the U.S. economy. Without access to this vital route, ships would need to navigate an additional 8,000 miles around South America, drastically increasing shipping times and costs.

Addressing Broader Regional Issues

While the implications of the canal and China’s role dominated discussions, Rubio indicated that other topics were also on the agenda. He mentioned efforts to address the ongoing migration crisis throughout the hemisphere and ensuring fair competition for U.S. businesses in Panama.

A New Chapter in Panama-U.S. Relations

This recent shift in Panama’s foreign policy signifies a potential new chapter in its partnership with the United States. As both nations work towards strengthening economic ties and regional stability, the focus on curtailing Chinese influence will likely remain a priority for U.S. diplomacy in Central America.

Fox News Digital also sought comment from the State Department, but did not receive an immediate response.

This report incorporates contributions from Fox News Digital’s Danielle Wallace.