Panama Capitulates – Will Not Renew 2017 Deal With China. What’s Next?

I don’t know about all of you, but I’m not yet tired of winning – although in this case, we haven’t won the whole enchilada. At least, not yet.

As my colleague Bonchie noted earlier on Sunday, Secretary of State Marco Rubio went to Panama to explain to Panama’s President José Raúl Mulino about President Trump’s concern with China’s Road and Belt Initiative moving in on the Panama Canal. No sooner did we get to read about that before word came out: Panama folded and promised to not only not renew their 2017 deal with China, but to try to find a way to skate out of it early. Remarkable.

The President of Panama, José Raúl Mulino has announced that following his meeting yesterday with U.S. Secretary of State Marco Rubio, Panama has decided not to renew its 2017 Memo with China, regarding their “Belt and Road Initiative” and that they will look towards voiding… pic.twitter.com/nzRAyIpdza

— OSINTdefender (@sentdefender) February 2, 2025

The X post reads in full:

The President of Panama, José Raúl Mulino has announced that following his meeting yesterday with U.S. Secretary of State Marco Rubio, Panama has decided not to renew its 2017 Memo with China, regarding their “Belt and Road Initiative” and that they will look towards voiding their Agreements with the Chinese Government prior to their End Dates set for 2027 and 2028.

It would have been roundly interesting to have sat in on the conversation our SecState, Marco Rubio, had with President Mulino. Our guy was obviously, shall we say, persuasive.

Previously on RedState: Does China Run the Canal?

UPDATED: Trump Admin. Lays Down the Law Over Panama Canal, Sets Up Major Confrontation; Panama Folds

So, what might happen next?

Twenty-four hours hours ago I would have thought it unlikely that Panama would be sanguine about the notion of kicking China out of the Canal Zone. I would have figured that the best thing we might have been able to do is make some kind of a deal with Panama about getting a reduced rate for American shipping going through the canal. But today it’s a different story. China will be leaving the Canal Zone, where they have been pushing for more and more influence over canal operations.

Need I point out that China having any influence over the Canal Zone isn’t in America’s best interest? The canal is a facility of vast strategic importance in addition to vast commercial importance. The WW2-era Iowa-class battleships, the most powerful and effective battleships the United States ever made, were specifically designed to (barely) pass through the Panama Canal. Our big, modern aircraft carriers can’t fit through – but the Navy’s smaller ships can. 

Control of the Canal Zone still matters.

Earlier, Bonchie wrote:

One of the issues here is that the Panama Canal Treaty of 1977, which was created and signed by an incredibly naive (at best) President Jimmy Carter, calls for total neutrality regarding the canal. Handing China control of operations is not neutrality. It’s a slap in the face to the United States and its generosity. China did not spend billions of dollars to build the canal, and because it is a geopolitical adversary, it is a national security risk for the communist country to have any involvement outside of paying fees to transit its ships.

It’s likely tariffs will be the first shoe to drop if Panama doesn’t acquiesce to the White House’s demands. For context, Panama imports over $12 billion a year in U.S. products and services, including lots of oil. By comparison, the United States imports less than one billion dollars in Panamanian products. In other words, Panama should probably be doing everything it can to avoid a trade war given it has far more to lose.

President Trump, then, has a much bigger economic stick to swing than does Panama’s President Mulino. Since these words were written, Panama has, to put it bluntly, folded like a cheap suit. China, one way or another, will be out. Maybe not for a few years, but the writing is on the wall. Now, President Trump has been insisting that the canal be returned to the United States, and he makes a good point: We paid for it, we built it, we lost people during that construction. Numbers vary, but the lowest I’ve seen is 300 American deaths in the building of the canal and thousands of deaths among workers from other countries. It was an American project, intended to further American trade and American military access. Giving it away was a mistake.

As of this writing, President Trump hasn’t made any statement on the acquiescence of Panama to his demands regarding China. It’s unclear if the president will continue to insist that the canal be returned to the United States. Twenty-four hours ago, I would have found the notion unlikely. Now, though? Possibly. And here’s the other question: How will China react to all this?

This seems appropriate:

This post was originally published on this site