Panama has officially withdrawn from China's Belt and Road Initiative, President Jose Raul Mulino announced on February 6, 2025. The decision comes amid US concerns about China's influence over the Panama Canal. Mulino denied US claims that American ships will now be able to transit the canal without paying fees.
US Secretary of State Marco Rubio, who visited Panama on February 5 as the first stop on his Central American tour, warned President Mulino that the US, where President Donald Trump has threatened to take control of the Panama Canal, would take action if there are no immediate changes to reduce China's influence in its management. Mulino dismissed the concerns, stating that any doubts could be clarified in discussions at a "technical level." He also confirmed that Panama will not renew its participation in the Belt and Road Initiative, which it has been a part of since 2017.
Rubio described Panama's decision as a significant step in strengthening relations with Washington. Mulino later confirmed Panama's official withdrawal from the initiative, which aims to revive the ancient Silk Road through large infrastructure projects. He stated that the Panamanian embassy in Beijing had sent a required 90-day notice to China regarding its decision not to renew its participation.
The cooperation agreement automatically renews every three years, with Panama's next renewal due in 2026. The agreement allows either party to withdraw with a three-month notice period.
The Belt and Road Initiative, a central part of China's strategy to expand its global influence, aims to secure supply chains for China by investing heavily in developing countries. Over 100 countries have joined the initiative, but critics warn that participating countries are being indebted and that the initiative prioritizes Chinese companies at the expense of local economies.
Mulino also categorically denied claims made by the US State Department that American ships will now be able to transit the Panama Canal without paying fees. He called the claims "inadmissible" and "clearly unfounded." He added that he rejects "bilateral relations based on lies and untruths," according to AFP.
This statement was in response to a Wednesday message on X from the US State Department, which stated that "US government vessels will now be able to transit the Panama Canal without fees, saving the US government millions of dollars annually." The company managing the canal immediately denied this claim.
Since his election in November 2024, US President Donald Trump has not ruled out the possibility of using force to take control of the canal, which handles 40% of US container traffic. He sees excessive Chinese influence in its management, which Panama denies.