Rubio warns Panama of U.S. retaliation if China's canal influence remains Secretary of State Marco Rubio told Panama officials that Chinese influence over the Panama Canal must be curbed or the U.S. will take retaliatory actions, the State Department said Sunday.
Why it matters: Rubio's warning to Panama President José Raúl Mulino and Foreign Minister Javier MartÃnez-Acha is another pressure point on the country since President Trump said he intended to regain control of the Panama Canal.
This is Rubio's first foreign trip since taking the oath as secretary of state.
Headlines driving the news: Since his victory last November to win a second presidential term, Trump has tripled down on his demands regarding the Panama Canal and hasn't ruled out using military force to get control of it.
His demands include U.S. ships paying lower rates to use the canal — after claiming that Panama charges American ships more than other nations.
Trump's complaints are partially based on the fact that a Hong Kong-based company has a contract for running the canal, which has been under Panama's control since 1999.
Mulino has so far rejected Trump's demands to hand over control of the canal back to the United States.
What they are saying: Rubio told Mulino and MartÃnez-Acha that Trump has made "a preliminary determination" that the existing Chinese influence over the Panama Canal area poses a threat to the canal, State Department spokeswoman Tammy Bruce said in a statement.
READ MORE: Is it safe to go to Panama right now from the USA?
Rubio said it also violates the treaty between the U.S. and Panama, which defines the neutrality and operation of the canal.
"Secretary Rubio was obvious that this status quo is unacceptable, and absent immediate changes, the United States would have to take measures necessary to protect its rights under the Treaty," Bruce said.
The other side: After a meeting with Rubio, Panama's president told reporters his country won't give up control over the canal, but stressed that the government is going to conduct an audit of Chinese-operated ports on both sides of the canal and present the findings to the U.S.
According to Mulino, Panama will not renew its agreement with China about the Beijing Belt and Road initiative, which will expire next year, and check whether it can get out of it sooner.
What are the implications of U.S. warnings to Panama?
and it has some serious geopolitical weight behind it. Warnings by the U.S. to Panama have a far-reaching impact politically and economically. Panamá is always a very strategic point, especially since it has the Panama Canal that links global trade routes. If the U.S. is giving out warnings, then it is bound to be concerned about Panama's economic policies,
foreign alliances- mostly with China even issues like money laundering and security threats. This history has been long in keeping American interests protected within the region; any change in Panama's policy or perceived instability is going to create economic pressure, strain in diplomatic relations, or even trade restraint. Since Panama relies mainly on international trade and foreign investment, any form of United States interference will disrupt its economy and have an effect on its political circumstances.
Funny enough, this reminds me of a time when I took a road trip with some friends. We got a "warning" from an old gas station owner about taking a shortcut through a sketchy back road. We ignored the warning and knew better, only to end up getting a flat tire in the middle of nowhere.
The situation with Panama feels a bit like that—ignoring a warning from a major power like the U.S. means navigating through dangerous territory. Whichever way Panama decides to side with U.S. interests or chart its own independent path, it is playing a high-stakes game. The U.S. could step up economic scrutiny, impose sanctions, or even influence international trade policies that would affect Panama. In either case, it is an event worth observing as it can end up shacking regional dynamics in Latin America.
How does China's presence in Panama impact U.S. interests?
China is expanding its influence in Panama. It's an expansion, among others, on which the United States is keeping a close eye. The Panama Canal is one of the world's most strategic waterways, and China, being a global economic powerhouse, has been making some serious investments there. With the Belt and Road Initiative,
China has funded infrastructure projects, ports, and logistics hubs to increase its influence in Panama and the wider Latin America region. But naturally, this irks Washington: with the Monroe Doctrine, Washington had always held Latin America in the "backyard," hence it is never so happy if some major world power gets its foot in Latin America. As fears go, such deep economic interlocks are expected to slowly translate into political leverage over which China would get the clout to check the U.S. dominance in various trade and regional affairs. Not to mention, a huge portion of U.S. trade still goes through the Panama Canal.
If China were to get a big piece of the action in logistics and operations, it could, in theory, disrupt or influence shipping routes in a way that favors its own interests. Funny enough, this situation reminds me of when I was playing a high-stakes poker game with some friends a few years ago.
One of them, let's call him Jake, dominated the table by smartly placing little but steady bets—just enough to stay in the game and not alert everyone else. In no time before we even noticed, he created such a formidable position that one could hardly dislodge it.
China is somewhat like Jake in Panama. Though it hasn't taken direct control, its investments have created a web of influence that's hard to ignore. The U.S. now finds itself in a tricky spot: try to push back aggressively and risk economic fallout or play along and hope for the best balance? Either way, it's a high-stakes geopolitical game, and the world is watching closely.
What potential actions could the U.S. take against Panama?
and it really depends on the context in which the U.S. would consider taking action against Panama. If we’re talking about economic or political pressure, Washington has several tools at its disposal. The U.S. could impose economic sanctions, restrict trade, or limit financial transactions through institutions like the World Bank or IMF.
The reason is that Panama plays a significant role in international finance and trade, especially through the Panama Canal. Any U.S. pressure could have widespread ripple effects, as the U.S. has historically used its economic influence to push smaller nations into compliance by threatening investment withdrawals or even restricting access to U.S. financial networks. However, a full-blown confrontation would be unlikely because both countries have strong economic ties, and the U.S. still relies on the Panama Canal for trade.
Funny enough, this topic reminds me of a wild debate I had back in college with an old professor who had actually lived through the 1989 U.S. invasion of Panama. He described how, at the time, the U.S. justified its actions by citing the need to remove General Manuel Noriega, who had turned against American interests. I remember challenging him on whether history could repeat itself—what if another leader in Panama clashed with Washington?
He just smirked and said, "The U.S. always finds a way to get what it wants." That stuck in my head, because, of course, now military action against North Korea appears far-fetched, but economic and political chicanery? That's where the real playing field is at. If tension ever arose again, I'll bet my last dollar that Washington would use the economic lever a long time before anything drastic, what do you think?
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