Trump Threatens Action Over Chinese 'Influence' In Panama Canal, Warns Of 'Powerful' Consequences

On Sunday, US President Donald Trump made a bold statement regarding the Panama Canal, claiming that "something very powerful is going to happen soon" over the Chinese "influence" and control of the critical waterway.

He emphasised that while the canal was not handed over to China, a breach of agreement had occurred.

The Panama Canal, which Trump has referred to as a modern "wonder of the world," was constructed by the US and opened in 1914, at the cost of many lives, primarily those of labourers from the Caribbean, including Barbados and Jamaica.

Upon returning to the White House, newly sworn-in President Trump threatened to seize control of the canal, which had been handed back to Panama in 1999 under President Jimmy Carter, asserting that it was now being operated by Beijing.

Trump stated, "China's running the Panama Canal... it was not given to China... But they violated the agreement and we're going to take it back or something very powerful is going to happen."

US Secretary of State Marco Rubio, a known critic of China, warned Panama's President José Raúl Mulino on Sunday, stating that Washington would "take measures necessary" if Panama did not take immediate action to end China's control over the vital waterway.

President Mulino, however, expressed that he was not concerned about a potential US invasion and proposed talks on the matter.

During his first overseas visit as the US Secretary of State, Rubio toured the canal with its Panamanian administrator, while South Korean and Marshall Islands-flagged vessels passed through the strategic passage.

Following the tour, Rubio met with Mulino, where he "made clear that this status quo is unacceptable" and insisted that without immediate changes, the US would take necessary measures to protect its rights under the treaty, as stated by State Department spokeswoman Tammy Bruce.

Mulino, in turn, indicated that his meeting with Rubio was respectful and cordial. He showed willingness to review certain Chinese business operations in Panama, including a significant 25-year concession with Hong Kong-based CK Hutchison Holdings, renewed in 2021 for managing the ports at both ends of the canal. This concession is under audit, according to a Reuters report.

The contract has been scrutinised by US lawmakers and officials as an example of China's expanding influence in Panama, which they claim contravenes a neutrality treaty signed by both countries in 1977.

However, the Panamanian government and some experts reject this view, particularly as the ports in question are not part of the Panama Canal's operations, which are overseen by the Panama Canal Authority, an autonomous agency of the Panamanian government.

President Mulino also stated that the broad agreement between Panama and China, which was part of China's Belt and Road initiative, will not be renewed.

This initiative had seen China increase its investments in Panama during prior administrations.