China Throws Weight Behind Panama Amid US Pressure

Beijing says it regrets Panama's decision to quit its signature foreign infrastructure development plan, accusing the United States of "sabotage."

Newsweek has reached out to the White House via email with a request for comment.

Why It Matters

Panama's President José Raúl Mulino told reporters on Thursday that the country had handed China a 90-day notice of withdrawal from the Belt and Road Initiative (BRI), a trillion-dollar program that has seen the participation of 150 countries since its launch in 2013. Mulino stressed the decision was Panama's and made before U.S. Secretary of State Marco Rubio's weekend visit.

The announcement follows tensions with Washington over the Panama Canal, a crucial global trade route that the U.S. ceded to Panama in 1999 after decades of administering the 51-mile waterway. President Donald Trump claims China controls it and has vowed to "take it back," citing national security concerns.

China has denied all allegations that it has any role in operating the Panama Canal.

What To Know

During the Chinese Foreign Ministry's regular press briefing on Friday, spokesperson Lin Jian said the BRI has had a positive impact on many nations and that China "deeply regrets" Panama's decision not to renew its 2017 memorandum of understanding (MOU) on joining the initiative.

He also rebuked the U.S. for the "smearing and sabotage of Belt and Road cooperation through the means of pressuring and coercion."

When a reporter pointed out that Mulino had said the withdrawal was his decision, Lin stressed Chinese-Panamanian ties have grown strong and produced "fruitful outcomes under the BRI framework." He called on the Latin American country to "make the right decision."

The U.S. has said the BRI amounts to "debt trap diplomacy," citing cases where developing countries hosting China-built megaprojects struggled to repay loans, leading to Beijing gaining strategic control over key infrastructure.

Rubio, meanwhile, has called Panama's exit from the initiative "a great step forward."

On Thursday, Mulino repudiated the U.S. State Department's claim earlier this week—now walked back—that Panama had agreed to waive transit fees for U.S. government vessels passing through the canal. The Neutrality Treaty signed by both countries in 1977 precludes the preferential treatment of any country when it comes to canal transits.

"[Panama] expresses my absolute rejection of continuing to explore managing bilateral relations on the basis of lies and falsehoods," Mulino said, according to a statement shared by the country's diplomatic missions.

The Trump administration has criticized the fees imposed on U.S. ships, particularly those belonging to the U.S. Navy, as excessive, calling them a "complete rip-off."

What People Are Saying

Panamanian President José Raúl Mulino told reporters Thursday: "I do not know what was the intention of those who signed this agreement with China. What has it brought to Panama all these years? What are the great things that this Belt and Road initiative has brought to this country?"

Lin Jian, Chinese Foreign Ministry spokesperson, said: "We hope Panama will bear in mind the overall bilateral relations and the long-term interests of the two peoples, steer clear of external disruption, and make the right decision."

What Happens Next?

The Trump administration has yet to provide evidence that China is directly involved in operating the Panama Canal.

A subsidiary of Hong Kong-based Hutchison Ports Holdings controls a port on either side of the canal. Panama's Comptroller General's Office has announced an audit of the company, which it has pledged to cooperate.