Panama president slams US claims on free canal access as 'lies'
5 Min Read
Panama strongly rejected the US claims on Thursday that its government vessels would have unrestricted access to the Panama Canal, labeling them as “lies and falsehoods.”
-
Panamanian President Jose Raul Mulino gestures before his meeting with Costa Rica's President Rodrigo Chaves Robles at the presidential palace in Panama City, on Friday, Aug. 23, 2024. (AP)
Panama rejected the United States' claim that it had agreed to allow US government vessels free passage through the Panama Canal, calling the allegation "lies and falsehoods."
Panamanian President Jose Raul Mulino called the US statement "intolerable, simply and plainly intolerable," adding that he rejected "bilateral relations based on lies and falsehoods."
The dispute followed remarks by the US State Department that Panama had agreed to let US government vessels transit the canal for free after talks between Mulino and US Secretary of State Marco Rubio.
In a post on X, the State Department claimed the decision would save the US "millions of dollars a year." However, the Panama Canal Authority swiftly denied the claim, stating it had "not made any adjustments" to its tariffs.
Why it matters
US government vessels, mainly from the Navy, represent a small fraction of the ships using the canal. President Trump has long complained about US vessels being overcharged for the route, and both he and Rubio have voiced concerns about Chinese investment in the canal, particularly a Hong Kong firm's control of port operations. They warned that Beijing could close the canal to the US during a crisis, a claim Panama has strongly denied.
Ahead of planned talks with Trump, Mulino confirmed that Panama had withdrawn from China's Belt and Road Initiative (BRI) infrastructure program. The Panamanian Embassy in Beijing had given the required 90-day notice to China regarding the non-renewal of Panama’s involvement in the BRI, which it joined in 2017.
Panama ends BRI deal amid US pressure
Panama has decided not to renew its participation in China's Belt and Road Initiative (BRI), President Jose Raul Mulino announced on Monday following a meeting with US Secretary of State Marco Rubio. The decision comes as Washington intensifies its efforts to curb Beijing's influence in Latin America, particularly in strategic trade and infrastructure sectors like the Panama Canal.
"I have made an important decision and I am informing you of it. My government will not renew the 2017 memorandum of understanding on the Belt and Road Initiative. That is true. We will study the possibility of ending the project ahead of schedule, but I think it should be renewed in a year or two, which happens every three years," Mulino said after his meeting with Rubio.
US applauds Panama's decision amid Canal tensions
Washington has long opposed BRI, claiming that China uses the initiative to expand geopolitical influence through the so-called "debt trap diplomacy." Rubio's visit to Panama reflects growing US concerns over China's presence in the region, with the Trump administration openly warning that Beijing's growing economic footprint in the Panama Canal could be a "national security threat."
Rubio pressed Mulino on Chinese influence in the canal, noting that Trump does not want to maintain the status quo regarding the waterway. The concern stems from the fact that CK Hutchinson Holdings, a Hong Kong-based company, operates key port terminals at both ends of the canal. While Panama has insisted that it retains full sovereignty over the canal, Washington has accused Beijing of using its economic ties to influence operations.
Read more: US threatens Panama over alleged 'China influence' in canal operations
After Panama's announcement, Rubio praised the decision as a major victory for US-Panama relations and a step toward limiting Chinese influence in Latin America.
"Yesterday's announcement by President @JoseRaulMulino that Panama will allow its participation in the CCP's Belt and Road Initiative to expire is a great step forward for US-Panama relations, a free Panama Canal, and another example of @POTUS leadership to protect our national security and deliver prosperity for the American people," Rubio posted on X (formerly Twitter) after leaving the country.
Panama's shift away from China and US leverage
Panama was the first Latin American country to officially join the Belt and Road Initiative in 2017, shortly after severing diplomatic ties with Taiwan in favor of Beijing. BRI, China's flagship infrastructure initiative, seeks to connect economies worldwide through investments in roads, ports, telecommunications, and energy projects.
While China defends the program, saying it fosters global development, Washington argues that the initiative burdens countries with unsustainable debt, expanding Beijing's political leverage.
Read more: Panama Canal chief rejects Trump's accusations of biased use of canal
Senator Ted Cruz has been among the leading voices in Congress calling for Panama to remove Chinese port operators, describing them as a "national security risk."
Meanwhile, some US officials have even raised the possibility that Chinese involvement could violate Panama's treaty obligations, fueling speculation over whether Washington might seek to regain influence over the canal.
