Panama Becomes First Latin American Nation to Exit China’s Belt and Road Initiative

President Jose Raul Mulino has announced that Panama will not renew its participation in China’s Belt and Road Initiative (BRI), making it the first Latin American country to withdraw from the global infrastructure program. The decision was made public following a high-level meeting between Mulino and U.S. Secretary of State Marco Rubio, signaling a potential shift in Panama’s geopolitical and economic alliances.

Panama initially joined the BRI in 2017, along with several other nations, as part of China’s efforts to expand its global influence through large-scale investments and infrastructure projects. However, Mulino’s announcement suggests a reevaluation of the country’s role in the initiative. According to a Reuters report, the broad agreement between Panama and China that facilitated Chinese investments under previous administrations will not be renewed.

The timing of Mulino’s decision coincided with Rubio’s first overseas visit as Secretary of State. During their meeting, Mulino indicated that Panama would now seek stronger economic ties with the United States, particularly in infrastructure development. “I think this visit opens the door to build new relations … and try to increase as much as possible U.S. investments in Panama,” he told reporters.

The discussions between Mulino and Rubio also focused on China’s presence near the Panama Canal, a key global trade route. Rubio reportedly warned that Panama must curb Chinese influence in the canal zone or face potential consequences from the Trump administration. He reiterated former President Donald Trump’s stance that China’s involvement in the canal violated a treaty between Panama and the U.S., which ensures the waterway’s permanent neutrality and permits American intervention if its operations are threatened.

“Secretary Rubio made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the treaty,” a U.S. State Department statement read.

While Mulino downplayed the notion of direct U.S. intervention, he confirmed that Panama would formally end its involvement with the BRI. He also acknowledged that an audit was underway regarding Chinese-linked companies operating two port terminals near the canal, adding that any legal actions would depend on the findings of the review.

Meanwhile, Trump has intensified his rhetoric against Panama, accusing the country of violating its treaty obligations regarding the canal. Speaking at Joint Base Andrews on Monday, he stated, “China is running the canal, it was not given to them. It was given to Panama foolishly. But they violated the agreement, and we’re either going to take it back or something very powerful is going to happen.”

With this move, Panama’s diplomatic and economic trajectory appears to be shifting closer to Washington, setting the stage for potential geopolitical tensions between the U.S. and China over the strategically vital Panama Canal.