President Donald Trump reiterated his vow to “take back” the Panama Canal on Sunday, warning of “powerful” US action in an escalating diplomatic dispute with the Central American country over China’s presence around the vital waterway.
“China is running the Panama Canal that was not given to China, that was given to Panama foolishly, but they violated the agreement, and we’re going to take it back, or something very powerful is going to happen,” Trump told reporters.
Hours earlier, the diplomatic stir caused by Trump’s repeated and publicly stated desire for the US to retake control of the canal had appeared to ease after Secretary of State Marco Rubio, making his first overseas trip as the top US diplomat, met with Panama’s President Raúl Mulino.
Though Mulino told Rubio that Panama’s sovereignty over the canal was not up for debate, he also said he had addressed Washington’s concerns over Beijing’s purported influence around the waterway.
In a significant move, Mulino announced that Panama would not renew a 2017 memorandum of understanding to join China’s overseas development initiative, known as the Belt and Road Initiative. He also suggested that the agreement with Beijing could be terminated ahead of schedule.
Mulino expressed interest in strengthening Panama’s relationship with the United States through new investments, particularly in infrastructure projects. “I think this visit opens the door to build new relations … and try to increase as much as possible US investments in Panama,” he said.
During the meeting, Rubio told Panama’s president and Foreign Minister Javier Martínez-Acha that concerns over China’s “control” of the Panama Canal could prompt the US to “take measures necessary to protect its rights” in accordance with a longstanding treaty governing the neutrality and operation of the canal.
The canal was officially transferred from US control to Panama under the 1977 Torrijos-Carter Treaties, which included provisions allowing the United States to intervene militarily if the canal’s operations were threatened by internal instability or foreign interference.
Despite the strong rhetoric from Washington, Mulino downplayed the likelihood of a US military intervention to reclaim the canal.
Mulino also revealed that Panamanian authorities are conducting an audit on a Chinese-linked company that operates two terminals around the canal.
“We have to wait until that audit ends before we can reach our legal conclusions and act accordingly,” Mulino said.
The company under review is the Panama Ports Company, a subsidiary of Hong Kong-based CK Hutchison Holdings. Hutchison Ports is one of the world’s largest port operators, managing 53 ports in 24 countries, including facilities in the United Kingdom, Australia, and Canada.
Reports indicate that while Hutchison does not directly control access to the canal, its workers handle cargo operations, including loading and unloading containers and supplying ships with fuel. Other companies also operate competing ports near the canal, providing similar services.
Beyond the canal dispute, discussions between the US and Panama also touched on migration issues. Mulino disclosed that Panama is in talks with the US about expanding a migrant repatriation program aimed at returning undocumented foreign nationals to their home countries.
Under the agreement signed in July, the initiative seeks to curb irregular migration through the treacherous Darien Gap, a dense jungle pathway connecting South and Central America. Thousands of migrants use this route each year to reach North America.
Mulino clarified that the repatriation program would operate entirely under US funding, stating, “We can do that, without a problem, under the total cost of the US. Panama won’t invest a single dollar in it.”
The program is expected to affect migrants from Venezuela, Colombia, Ecuador, and other nations.
The latest developments highlight growing geopolitical tensions between the United States and China over influence in Latin America. While Panama appears to be distancing itself from Beijing’s Belt and Road Initiative, its strategic location as a global trade hub makes it a key player in the competition between the world’s two largest economies.
As Washington signals potential intervention over the canal’s control, the coming months could determine the direction of US-Panama relations and the future of China’s involvement in the region.
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