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Trump’s hardline stance pays off: Panama backs away from China’s Belt and Road deal

By isabelle // 2025-02-03

• Panama ends a key development deal with China, reversing its stance on the Belt and Road Initiative after pressure from the U.S.
• U.S. Secretary of State Marco Rubio and President Trump warned that China's influence over the Panama Canal threatened U.S. national security.
• President Mulino emphasized Panama’s sovereignty over the canal but will review agreements with Chinese businesses, including port operations.
• Panama will expand a memorandum with the U.S. Department of Homeland Security to manage migration from the Darien Gap.
• The decision marks a shift toward closer U.S.-Panama relations and signals a broader trend in Latin America to align with U.S. interests against Chinese influence.

In a significant diplomatic victory for the Trump administration, Panama has agreed to end a key development deal with China, reversing its stance on the controversial Belt and Road Initiative. The decision, announced by President José Raúl Mulino following a high-stakes meeting with U.S. Secretary of State Marco Rubio, marks a dramatic shift in Panama’s approach to the Panama Canal, a vital waterway that has long been a source of strategic interest for the United States. The move comes after President Donald Trump and Secretary Rubio applied intense pressure on the Panamanian government, warning that China’s influence over the canal posed a threat to U.S. national security. Trump has long criticized China’s presence in the region, arguing that Beijing’s control over ports near the canal could undermine American interests. The administration’s aggressive stance has not only forced Panama to reconsider its ties with China but also highlighted the new administration’s commitment to a robust foreign policy that prioritizes American sovereignty and security.

Trump’s rapid diplomatic success

The Trump administration’s rapid success in Panama is a testament to the president’s ability to secure significant geopolitical wins in a short period. Since taking office, Trump has already achieved several notable accomplishments, including a 94% reduction in border crossings after declaring a national emergency and sending U.S. troops to the southern border. He has also freed six hostages from Venezuela, halted foreign aid to Ukraine, and imposed tariffs on China, Canada, and Mexico for failing to address illegal immigration and fentanyl trafficking. In the context of the Panama Canal, Trump’s strategy has been clear: he is willing to use all available leverage to protect American interests. During the Senate hearing on the issue, U.S. officials warned that fines and restrictions on Panamanian-flag vessels entering U.S. ports could be imposed if Panama did not address the canal dispute. Trump’s refusal to rule out military action, while not immediately necessary, underscored the seriousness of his demands.

Panama’s reversal and new U.S. ties

President Mulino’s announcement that Panama will not renew the memorandum of understanding with China’s Belt and Road Initiative is a significant step. The deal, signed in 2017, had been a cornerstone of Panama’s economic strategy, aimed at attracting Chinese investment and development. However, U.S. concerns over China’s growing influence in the region, particularly around the canal, have now led Panama to reconsider its approach. During his meeting with Rubio, Mulino emphasized that Panama’s sovereignty over the canal remains intact. However, he acknowledged that the country would review its agreements with Chinese businesses, including the 25-year concession granted to Hong Kong-based CK Hutchison Holdings for the operation of ports at both entrances of the canal. This concession, which was renewed in 2021, has been a focal point of U.S. criticism. "We are going to study the possibility of whether it can be finished earlier or not," Mulino said, adding that the agreement is due for renewal in one or two years. The president also announced that Panama would expand a memorandum of understanding with the U.S. Department of Homeland Security to facilitate the return of migrants from the Darien Gap, a move that aligns with Trump’s efforts to curb illegal immigration.

A new chapter in U.S.-Panama relations

The meeting between Rubio and Mulino was described as "respectful and cordial," despite the high stakes. Rubio, a longtime critic of China’s influence in Latin America, emphasized the need for immediate action to address U.S. concerns. The visit also reflects a broader U.S. strategy to reassert its influence in the Western Hemisphere and counter China’s growing economic and political presence. Rubio’s tour of Central America and the Caribbean is part of this effort, aimed at strengthening ties with regional partners and addressing issues such as migration and security. Panama’s decision to end its deal with China could have far-reaching implications. It signals a willingness among Latin American countries to align more closely with U.S. interests, especially in the face of growing Chinese influence. For Trump, this marks another significant victory in his efforts to reshape the global order and protect American sovereignty. The rapid success of the Trump administration in Panama is a clear demonstration of the president’s ability to get things done and his unwavering commitment to American interests. As the administration continues to tackle complex global challenges, it is clear that Trump’s approach is not only effective but also resonating with leaders around the world.   Sources for this article include: ZeroHedge.com FoxNews.com APNews.com

China Trump Marco Rubio Panama Panama Canal