Panama Reassures Sovereignty Over Canal Amid Shift in Relations with the U.S.

In a significant diplomatic shift, Panama’s president has announced plans to end a pivotal development agreement with China following a visit from U.S. Secretary of State Marco Rubio. This decision comes after heightened concerns voiced by President Donald Trump regarding Chinese control over the strategically vital Panama Canal.

Presidential Commitment to U.S. Ties

José Raúl Mulino, the president of Panama, emphasized that his nation’s sovereignty over the 51-mile-long canal, which connects the Pacific Ocean to the Caribbean Sea, will remain intact. He declared he would not renew the 2017 memorandum of understanding that aligned Panama with China’s Belt and Road Initiative. Instead, Panama is poised to deepen its partnership with the United States.

“This visit opens the door to new relationships and aims to enhance U.S. investments in Panama,” Mulino stated to reporters following his meeting with Rubio. This engagement marks a pivotal moment in U.S.-Panamanian relations.

Rubio’s Diplomatic Endeavors

Marco Rubio, once a Florida senator and now the U.S.’s chief diplomat, expressed readiness to advance the United States’ agenda. He highlighted that his team is focused on ensuring that the Chinese Communist Party does not extend its influence over the Canal region. In a post on X, Rubio stated, “The United States cannot, and will not, allow the Chinese Communist Party to continue its growing control over the Panama Canal area.”

Concerns Over Chinese Control

President Trump has raised alarms over China’s influence in the canal, which charges U.S. ships significant fees to traverse Panama’s isthmus. Completed by the U.S. in 1914, the canal was eventually transferred to Panama during the Carter administration. Regaining ownership of the Panama Canal has become a central focus of Trump’s administration.

Recently, House Republicans introduced the Panama Canal Repurchase Act, which advocates for the U.S. to reacquire the canal amid these rising concerns. This legislation was introduced by Rep. Dusty Johnson of South Dakota, a member of both the Select Committee on China and the House Transportation and Infrastructure Committee.

Legislative Action and Concerns

Rep. Johnson expressed support for the initiative, 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—owning and operating the Panama Canal might be a critical step toward a stronger America and a more secure globe.”

Potential Impacts of the Repurchase Act

If enacted, the Panama Canal Repurchase Act would authorize the president to negotiate with Panama’s government regarding the canal’s reacquisition. The bill aims to safeguard U.S. interests in this strategic waterway, which plays a vital role in international shipping and trade.

The U.S. Department of State estimates that approximately 72% of vessels using the Canal are headed to or coming from American ports, underscoring its significance in U.S. commerce. Additionally, the waterway serves as a crucial transit point for U.S. Coast Guard and Department of Defense vessels.

The Broader Context

Without access to the Panama Canal, ships would have to detour an additional 8,000 miles around South America, significantly increasing travel time and costs. More than 10,000 ships pass through the canal each year, generating billions in tolls that benefit the U.S. economy.

While discussions centered on the canal’s future, Rubio also addressed other pressing matters, such as efforts to tackle the ongoing migration crisis throughout the hemisphere and fair competition for U.S. businesses in Panama.

As this diplomatic saga unfolds, the implications for U.S.-Latin American relations remain profound. Enhancing ties with Panama signals a potential shift in the geopolitical landscape, especially regarding regional responses to Chinese influence.

A New Horizon for U.S.-Panama Relations

The recent developments highlight a pivotal moment for Panama and its relationship with the United States. With President Mulino’s commitment to enhancing sovereignty and U.S. engagement, both nations may experience a revitalization of their longstanding partnership, aligning with shared interests in security, trade, and infrastructure development.