U.S. Secretary of State Marco Rubio has called on Panama to make “immediate changes” to what he describes as China’s “influence and control” over the Panama Canal.
America’s top diplomat warned that if Panama failed to act, the U.S. would take necessary measures to safeguard its rights under a treaty between the two nations.
The demand comes after President Donald Trump’s pledge to reclaim the canal and a meeting between Rubio and Panama’s conservative President, José Raúl Mulino, in Panama City on Sunday.
The two leaders appeared to walk away from their two-hour discussion with differing interpretations of the outcome.
Mulino, while not addressing the ultimatum over the canal, announced during a Sunday news conference that his administration would not renew Panama’s agreement with China on the “Belt and Road” investment initiative, which was originally signed by a former president in 2017.
Rubio hailed the decision as “a great step forward” in a post on X on Monday morning before departing Panama.
“[A]nother example of [President Trump’s] leadership to protect our national security and deliver prosperity for the American people,” Rubio wrote.
Mulino also downplayed the possibility of U.S. military intervention to seize the canal, stating that he had proposed technical-level discussions with Washington to address Trump’s concerns about China’s presence.
Backlash and Protests in Panama
Trump’s vow to retake the canal has ignited strong opposition in Panama. On Friday, protesters in Panama City burned effigies of Trump and Rubio.
Riot police responded to another group of demonstrators, using tear gas and forcibly removing protesters. While the clashes remained relatively small, widespread resistance to the U.S. president’s stance is evident.
On Thursday, Mulino firmly stated that Panama’s ownership of the canal was not up for debate.
“I cannot negotiate or even open a negotiation process about the canal. It’s sealed, the canal belongs to Panama,” he said.
Trump’s remarks about the canal have included an unsubstantiated claim that Chinese soldiers are operating it. He also alleged that American ships are being charged higher fees than other vessels—despite such a practice being illegal under existing treaty agreements.
The canal remains owned and operated by the Panamanian government under a neutrality treaty signed decades ago with the U.S. However, Chinese companies have made substantial investments in ports and terminals near the canal. A Hong Kong-based company operates two of the five ports near its entrances.
Rubio Asserts A Policy Shift At Panama CanalA Surge of Nationalism in Panama
Trump’s aggressive stance—even his refusal to rule out military action—has stirred nationalist sentiment in the strategically located country.
“It’s ridiculous,” said Panama City resident Mari, who requested that her last name not be published.
“There’s a treaty that he has to respect, and there’s nothing in the treaty that says that we cannot have ports run by the Chinese,” she told the BBC, adding that Chinese investments exist in U.S. ports and cities as well.
Amid the bustling streets lined with tourists and souvenir vendors selling Panama hats, Mari reflected on Panama’s history under U.S. control and the deep-rooted desire to avoid a return to that era.
Under the terms of a 1979 treaty between the U.S. and Panama, a transition period led to Panama gaining full control of the canal in 1999.
“We could not cross into the canal zone without being arrested if we didn’t follow all the American rules. The minute you stepped across that border, you were in the United States,” Mari said.
“We had no rights within our own country, and we will not put up with that again… We are very insulted by [Trump’s] words.”
Trump’s refusal to rule out military force has also sparked fear among some Panamanians, evoking memories of the 1989 U.S. invasion to oust de facto ruler General Manuel Noriega. The conflict lasted several weeks and quickly overwhelmed Panamanian forces.
“I was the political leader of the opposition when Noriega said he was going to kill all the leaders of the opposition if the U.S. were to invade,” recalled former Panamanian congressman Edwin Cabrera, speaking to the BBC near the canal’s Pacific entrance.
“I heard the bombs and started seeing people dying… The only thing President Trump and Rubio have left to say is that they will invade us,” he said. “I wouldn’t like to live that again in the 21st century, relive the imperial experience. Panama is caught in a power struggle between the U.S. and China while we are left looking to the sky.”
Rubio’s Hardline Stance on China
Marco Rubio, the first Hispanic U.S. Secretary of State, is known for his tough stance on certain regional leaders and on China. While Panama maintains close cooperation with the U.S. on many issues, Rubio’s visit signals Washington’s growing intolerance of Latin American nations deepening ties with China, which the U.S. views as an encroachment on its sphere of influence.
In Panama, Rubio has argued that China’s economic presence near the canal could pose a security risk, potentially allowing Beijing to obstruct U.S. merchant or military vessels in a future conflict or trade war.
“If China wanted to obstruct traffic in the Panama Canal, they could. That’s a fact… That’s what President Trump is raising and we’re going to address that topic… That dynamic cannot continue,” Rubio said on The Megyn Kelly Show last week.
While most Panamanians strongly support their country’s control of the canal, some remain critical of how it has been managed, arguing that its economic benefits are not widely shared among citizens.
“What you see here—that the United States and Donald Trump want to take back the canal—that’s what we call cause and effect,” said Andre Howell, a hotel worker in Panama City’s historic district.
“They’re not administrating the Panama Canal the right way… No Panamanians have [the] benefits,” he said.