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U.S. Demands Panama Curb Chinese Canal Influence in 2025 Talks

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U.S. Demands “Immediate Changes” to Panama Canal Governance


U.S. Secretary of State Marco Rubio issued a stark warning to Panama’s President JosĂ© RaĂşl Mulino during high-stakes talks in Panama City this week, demanding “immediate changes” to curb China’s growing influence over the Panama Canal.

The diplomatic push follows years of U.S. concerns about Beijing’s strategic foothold in the critical maritime corridor, which handles 5% of global trade.

Diplomatic Talks Highlight U.S.-China Tensions


Rubio’s visit – his first international trip as Secretary of State – focused on reasserting U.S. authority under the 1977 Torrijos-Carter Treaties, which guarantee Panama’s sovereignty over the canal while ensuring U.S. rights to defend its “neutrality.”

During closed-door meetings, Rubio reportedly warned that Chinese state-linked companies’ control over canal infrastructure violates these agreements.

Key developments from the talks:

  • Panama confirmed it will not renew its 2017 Belt and Road Initiative (BRI) partnership with China, ending infrastructure projects tied to the canal zone
  • Mulino pledged closer collaboration with U.S. agencies on canal security and modernization efforts
  • Both nations agreed to establish a joint task force addressing regional migration and drug trafficking

Why the Panama Canal Matters


The 50-mile waterway remains vital to global commerce:

MetricDetail
Annual Ship Transits14,000+
Cargo Volume450 million tons
U.S. Trade Share68% of canal traffic

(Source: Panama Canal Authority 2024 data)

Chinese firms have increasingly dominated canal operations since 2016, winning contracts for:

  • Port expansions
  • Bridge construction
  • Logistics hubs

This expansion triggered alarms in Washington, particularly after China Merchants Port Holdings acquired a major stake in Margarita Island’s container terminal.

Trump’s “Reclaim the Canal” Rhetoric Resurfaces


Former President Donald Trump amplified pressure on Panama ahead of Rubio’s visit, reiterating claims that China “stole” canal control through corrupt deals. During a Fox News interview, Trump warned:

“We built it, we paid for it, and we’re going to take it back – or something very powerful will happen”.

While current U.S. officials distanced themselves from Trump’s remarks, analysts note his statements reflect bipartisan concerns about Chinese influence in Latin America.

Panama’s Balancing Act


President Mulino struck a conciliatory tone post-meeting, stating:

“Our dialogue with Secretary Rubio was respectful and productive. Panama remains committed to sovereign decisions that benefit our people first.”

However, challenges persist:

  • Economic Pressures: China remains Panama’s second-largest trading partner ($2.3B annual trade)
  • Domestic Criticism: Opposition leaders accuse Mulino of capitulating to U.S. demands
  • Canal Upgrades: $2.5B modernization plan requires international financing

Regional Implications


The talks signal broader U.S. efforts to counter China’s Latin American footprint:

  1. Nicaragua Canal Project: Defunct Chinese-backed rival to Panama Canal
  2. El Salvador Port Deal: Recent U.S. intervention in Chinese port contract
  3. Argentina Lithium Rights: Ongoing U.S.-China competition for resources

Energy analyst MarĂ­a González notes: “Who controls the Panama Canal controls access to both hemispheres. This isn’t just about trade – it’s about hemispheric security”.

What Comes Next

  • July 2025: U.S.-Panama task force holds first meeting on canal security
  • Q3 2025: Deadline for Panama to finalize new canal operator contracts
  • 2026: Planned completion of U.S.-funded surveillance system along canal

As Rubio departed Panama, he emphasized: “This isn’t about choosing sides – it’s about upholding agreements that keep global commerce flowing safely.”

Yet with China vowing to “protect legitimate interests” in Panama, the canal’s future remains a geopolitical flashpoint.

Authors

  • David Thompson

    David Thompson is a veteran world news reporter with a decade of experience covering global events and their social, political, and economic implications. His comprehensive coverage includes conflict zones, international diplomacy, and major geopolitical developments. David’s insightful analysis and in-depth reporting have earned him recognition as one of the most reliable sources for breaking news from across the globe.

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  • CALISTA HARGROVE

    Calista Hargrove is the Chief Editor at NewsCentral360, having joined the team in November 2024. With a strong editorial vision and expertise in content creation, she leads the newsroom with precision and creativity. Calista’s primary focus includes contributions to TechBytes, where she covers a broad range of topics such as Technology, Cybersecurity, Cloud, Data, and IoT. Her versatility extends to Health News, showcasing her ability to deliver insightful and impactful stories across diverse domains. A graduate of MIMCJ, Calista is passionate about innovation and thrives in the ever-evolving world of journalism. Her dedication to exploring emerging tech trends and honing her craft as a digital storyteller underscores her leadership in shaping NewsCentral360’s dynamic content. When not immersed in her editorial responsibilities, Calista enjoys connecting with her readers and staying ahead of industry trends. You can reach her at calista.hargrove@newscentral360.com. She graduated from MIMCJ and is passionate about innovation, continuously seeking to grow in the dynamic field of journalism. When not immersed in content creation, Calista enjoys exploring emerging tech trends and honing her skills as a digital storyteller. You can connect with her at calista.hargrove@newscentral360.com.

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