Panama’s BRI Withdrawal Marks Major U.S. Win in Geopolitical Chess Game

U.S. Secretary of State Marco Rubio declares Panama’s exit from China’s Belt and Road Initiative (BRI) a win for American diplomacy, marking the first Latin American nation to abandon Beijing’s flagship infrastructure program.

President José Raúl Mulino confirms Panama will let its 2017 BRI agreement expire, refusing renewal amid pressure from Washington to counter China’s expanding influence. Panama joins the ranks of nations distancing themselves from the BRI.

However, it continues to secure Chinese investments in ports and bridges near the Panama Canal. Hong Kong-based Hutchison Ports operates two terminals at the canal’s entrances under a 25-year concession renewed without bidding in 2021.

Rubio warns Chinese control of critical infrastructure threatens the canal’s neutrality under the 1977 Torrijos-Carter Treaty, which allows U.S. military intervention if operations are disrupted.

An ongoing audit of Hutchison’s concession could revoke the contract, opening bids to U.S. or European firms. Meanwhile, Chinese state firms COSCO and China Communications Construction Company build a $1.4 billion bridge over the canal, deepening concerns over debt dependency.

Panama owes China 60% of its $24 billion external debt. President Donald Trump escalates tensions by threatening to “take back” the canal if Chinese influence persists, citing treaty violations.

Panama’s Strategic Shift Amid U.S.-China Rivalry

Rubio echoes Trump’s stance during his first foreign trip, securing Mulino’s commitment to prioritize U.S. Navy transit and allow deportations via the Metetí airstrip. The U.S. funds repatriation flights, returning migrants to several countries and slashing Darién crossings significantly.

Panama’s pivot reflects broader regional skepticism toward Beijing. Italy exits the BRI in 2023, while Brazil rejects membership over opaque terms. Critics argue China’s “debt-trap diplomacy” locks nations into unsustainable loans, though Beijing denies coercion.

Mulino emphasizes Panama’s sovereignty remains non-negotiable, dismissing Trump’s threats as posturing. Yet his administration balances economic pragmatism.

China drives a significant portion of global trade through the canal, while U.S. vessels comprise a substantial share of traffic. The move underscores Washington’s strategy to counter BRI through alliances and audits.

Rubio’s visit yields pledges to review all Chinese contracts, signaling a recalibration toward Western partnerships. As Panama navigates superpower rivalry, its choices will test whether sovereignty or economic necessity dictates tomorrow’s alliances.

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