Panama rebukes US over false claims regarding Panama Canal and denies free passage deal

On Wednesday, the US State Department sparked outrage in Panama by claiming that the country had agreed to no longer charge US government vessels tolls to pass through the Panama Canal. According to the US, this concession would save Washington millions of dollars annually. However, Panama’s authorities swiftly refuted this assertion. The Panama Canal Authority issued a statement clarifying that there had been no changes to the canal's toll structure or any such agreement regarding US government vessels.

Panama's president José Raúl Mulino, in an official response on Thursday, labeled the US State Department’s claim a “quite simply intolerable falsehood.” He expressed surprise at the allegations, which he described as based on an outright lie. This sharp rebuttal has intensified the diplomatic tension between the two countries, adding fuel to an already volatile situation.


The dispute over the canal is not an isolated incident. Former President Donald Trump has continued to voice his displeasure about the Panama Canal being transferred back to Panama's control in 1999. Trump recently reiterated that the US had “foolishly” handed over the canal to Panama and threatened to “take it back” unless drastic actions were taken. This language has raised alarm in Latin America, where Trump’s rhetoric is seen as a throwback to the days of US dominance in the region.

Meanwhile, US Secretary of State Marco Rubio, during a tour of Latin America, told Mulino that the US government believes Chinese influence over the canal is unacceptable and posed a threat to US interests. This message further underscored the deepening rift between Panama and the US, with both countries at odds over the control and future of the critical waterway.


The underlying issue at play is the growing geopolitical rivalry between the US and China. Over the past few decades, China has expanded its economic footprint in Latin America and the Caribbean, significantly challenging the US's longstanding dominance in the region. One of the more contentious points of this rivalry is the Panama Canal, an essential global shipping route.

Trump’s position seems to be motivated by his desire to curb China’s growing influence, especially in countries like Panama, which has become increasingly involved in China’s Belt and Road Initiative. The US perceives China's engagement in the region as a direct challenge to its influence and control over Latin American affairs. This tension escalated this week when Panama’s president announced that his government would end its participation in the Belt and Road Initiative, signaling a shift away from China in favor of a more aligned position with the US.


In response to the escalating rhetoric from the US, China condemned the remarks made by US officials regarding the Panama Canal. A Chinese foreign ministry spokesperson accused the US of distorting and mischaracterizing Panama’s cooperation with China, specifically under the Belt and Road Initiative. The spokesperson highlighted the fruitful outcomes of the partnership, portraying it as beneficial for Panama’s development.

The exchange marks a critical point in the broader global struggle for influence between the US and China, especially as both superpowers vie for strategic leverage in key regions like Latin America. Panama’s response, particularly its decision to sever ties with China’s infrastructure initiative, demonstrates the delicate balance the country is trying to maintain amid external pressures from both Washington and Beijing.