Panama has signaled its distancing from China following concerns raised by the United States regarding China's influence in Panama and its Canal. President José Raúl Mulino stated that there are no plans to resume talks with Beijing regarding the Belt and Road Initiative, calling it a past 'problem'.
The US views China's Belt and Road Initiative and the Chinese involvement in Panamanian ports as threats to its regional hegemony. A planned sale of a majority stake in the ports from CK Hutchison (CKH) to BlackRock, with participation from MSC, has been delayed amid alleged Chinese interference. While the transaction's completion remains uncertain, Panama maintains communication with all parties involved.
The US government considers both Panama's withdrawal from the Belt and Road Initiative and the potential CKH port sale as foreign policy successes. A phone call between Panamanian and US officials highlighted Panama's efforts to counter 'malign Chinese influence' and praised the auditing of the ports. Panama and the US have also reaffirmed cooperation on issues like migration and crime.
China's embassy in Panama accused the US of sowing discord. China opposes what it calls coercive economic practices. The context includes broader US-China trade tensions, with US tariffs imposed on Chinese goods, impacting Panama as well. The situation places Panama in a complex geopolitical balancing act.
Panama is hosting joint military exercises with the US focused on Canal security, further highlighting the strengthening US-Panama relationship. The visit of the US Secretary of Defense is also anticipated.