Panama Cancels Belt and Road Agreement Amid U.S. Pressure

Strategic Shift: Reducing Chinese Influence in the Panama Canal

In a significant geopolitical move, Panama has officially canceled its participation in China’s Belt and Road Initiative (BRI), citing mounting pressure from the United States to curb Beijing’s growing influence in the region.

A Bold Decision Under U.S. Scrutiny

On Thursday, February 6, Panamanian President José Raúl Mulino announced the termination of the economic agreement with China. His government formally submitted the cancellation notice to Beijing, adhering to the agreement’s 90-day exit clause. This decision aligns with Washington’s long-standing concerns about China’s strategic footprint in the Panama Canal, a critical global trade route.

Diplomatic Pressure from the U.S.

The timing of this decision is no coincidence. Just four days earlier, U.S. Secretary of State Marco Rubio visited Panama with a clear mission: to counter China’s presence in the interoceanic canal. This visit followed former U.S. President Donald Trump’s warnings about reclaiming control over the vital trade passage.

China’s Belt and Road Initiative, launched in 2013, has driven infrastructure projects worldwide, forging economic ties with over 100 countries across Asia, Africa, and Latin America. The U.S., however, views the initiative as a strategic tool for Chinese global expansion, often warning that it leads to economic dependency and security risks.

Reevaluating the Benefits for Panama

Mulino’s skepticism about the deal was evident even before the official announcement. After his meeting with Rubio on Sunday, he openly questioned the tangible benefits of the Belt and Road Initiative for Panama.

"What has this brought to Panama all these years? What great things has this agreement delivered to our country?" he asked, signaling doubts about whether the deal had truly enhanced Panama’s economic prospects.

Originally signed in 2017 under former President Juan Carlos Varela, the agreement automatically renews every three years unless either party opts out with three months’ notice. Mulino’s decision means Panama will not continue under Beijing’s economic umbrella, a move that could redefine the nation’s future trade alliances.

Strengthening Ties with Washington

For the U.S., this marks a diplomatic victory. On Monday, Rubio hailed Panama’s decision as a “big step” toward closer cooperation with Washington. American officials have repeatedly argued that the Belt and Road Initiative serves as a vehicle for Chinese geopolitical ambitions, with potential long-term security risks.

On the other hand, China’s Foreign Ministry spokesperson Lin Jian defended the initiative, stating that China-Panama cooperation had been productive and urging Panama to resist external interference.

A New Chapter in Panama’s Foreign Relations

Panama’s withdrawal from the Belt and Road Initiative could signal a broader realignment of its economic and diplomatic priorities. As the rivalry between China and the U.S. intensifies, this decision highlights the growing pressure smaller nations face in navigating superpower tensions.

What’s Next for Panama?

With China’s economic backing now in question, Panama may seek new trade and infrastructure partnerships, particularly with the United States and other Western allies. Will this move ultimately strengthen Panama’s economy, or could it create new vulnerabilities in its global positioning?

What are your thoughts on this shift? Share your insights in the comments!

Sam Smith