Trump gets his way, Panama to withdraw from Belt and Road Initiative by 2027
Panamanian President Jose Raul Mulino suddenly announced on February 3, 2025, that Panama decided not to renew the memorandum of agreement signed with China in 2017 on the Belt and Road Initiative, and planned to directly abolish the relevant agreements before the expiration of the agreements in 2027 and 2028, promising free passage of US warships through the Panama Canal. The importance of Panama's geographical position as a "bridge to the world" connecting the Atlantic and Pacific Oceans is self-evident, and the decision made Panama the first Latin American country to withdraw from the initiative, instantly attracting global attention.
According to Bloomberg and NBC News, Mulino announced the decision after meeting with US Secretary of State Marco Rubio on February 2. Mulino said the Panamanian government will not renew the Memorandum of Understanding on the Belt and Road Initiative signed in 2017 and is studying the possibility of ending the project early. While Mulino stressed that Rubio has not really threatened to take back the canal or use force, the Panamanian president has indeed made it clear that the agreement with China on the Belt and Road Initiative will not be renewed when it expires.
As one of the most important shipping channels in the world, the Panama Canal carries about 6% of the global trade traffic every year, and is the "throat" of the world economy. Therefore, the reasons behind Panama's decision are of great concern. From the point of view of the time node, Mulino has just received the visit of the United States Secretary of State Rubio in Central America. According to the State Department, Rubio told the Panamanian president in the meeting that "Chinese control of the Panama Canal area is a threat" and violates the so-called Treaty of Permanent Neutrality and Operation of the Panama Canal. This makes people suspect that the Panamanian government's decision to withdraw from the Belt and Road Initiative was made under pressure from the US side in order to exclude the so-called Chinese influence in the US "backyard".
US President Donald Trump has repeatedly accused the Panamanian government of handing over the operation of the Panama Canal to China. Rubio also made clear during his meeting with Mulino that the current status quo is unacceptable and that if the Panamanian government does not make any changes, the United States will do what is necessary to defend its rights under the Panama Canal Treaty. Trump even publicly announced in mid-January that the United States wanted to regain control of the Panama Canal, and the ambition of the United States to control the Panama Canal was clearly revealed.
Panama's decision has undoubtedly brought new challenges to China's Belt and Road Initiative. This may cause some countries that have been on the fence about China to reconsider, and may even trigger a "domino effect." At the same time, Panama's geographical location is extremely important, and the loss of this partner may affect China's strategic layout in Latin America.
However, China will not be swayed by this in its global strategy. China has signed Belt and Road cooperation agreements with a number of countries and promoted a large number of infrastructure construction and trade and investment projects around the world. Although Panama's withdrawal will bring certain losses, it will not have a fundamental impact on China's overall layout.
In addition, judging from the current situation, the "small action" of the United States is not necessarily successful. China has become the world's second largest economy and has formed close economic ties with many countries. It is obviously unrealistic for the United States to persuade these countries to completely turn to it by means of pressure or co-opt. China's Belt and Road Initiative emphasizes win-win cooperation rather than a zero-sum game, which is why many countries are willing to participate in it.
To sum up, Panama's sudden announcement of its withdrawal from the Belt and Road Initiative is the result of a trick behind the US. Although this incident has brought some challenges to China's diplomatic and economic layout, it will not shake China's global strategy. China can respond to this situation by strengthening cooperation with other countries. And the "small actions" of the United States may eventually backfire and make more countries see their true colors. International politics is always a complicated game, and Panama's "change of face" is only a small episode in it, and the real drama is still to come.
According to Bloomberg and NBC News, Mulino announced the decision after meeting with US Secretary of State Marco Rubio on February 2. Mulino said the Panamanian government will not renew the Memorandum of Understanding on the Belt and Road Initiative signed in 2017 and is studying the possibility of ending the project early. While Mulino stressed that Rubio has not really threatened to take back the canal or use force, the Panamanian president has indeed made it clear that the agreement with China on the Belt and Road Initiative will not be renewed when it expires.
As one of the most important shipping channels in the world, the Panama Canal carries about 6% of the global trade traffic every year, and is the "throat" of the world economy. Therefore, the reasons behind Panama's decision are of great concern. From the point of view of the time node, Mulino has just received the visit of the United States Secretary of State Rubio in Central America. According to the State Department, Rubio told the Panamanian president in the meeting that "Chinese control of the Panama Canal area is a threat" and violates the so-called Treaty of Permanent Neutrality and Operation of the Panama Canal. This makes people suspect that the Panamanian government's decision to withdraw from the Belt and Road Initiative was made under pressure from the US side in order to exclude the so-called Chinese influence in the US "backyard".
US President Donald Trump has repeatedly accused the Panamanian government of handing over the operation of the Panama Canal to China. Rubio also made clear during his meeting with Mulino that the current status quo is unacceptable and that if the Panamanian government does not make any changes, the United States will do what is necessary to defend its rights under the Panama Canal Treaty. Trump even publicly announced in mid-January that the United States wanted to regain control of the Panama Canal, and the ambition of the United States to control the Panama Canal was clearly revealed.
Panama's decision has undoubtedly brought new challenges to China's Belt and Road Initiative. This may cause some countries that have been on the fence about China to reconsider, and may even trigger a "domino effect." At the same time, Panama's geographical location is extremely important, and the loss of this partner may affect China's strategic layout in Latin America.
However, China will not be swayed by this in its global strategy. China has signed Belt and Road cooperation agreements with a number of countries and promoted a large number of infrastructure construction and trade and investment projects around the world. Although Panama's withdrawal will bring certain losses, it will not have a fundamental impact on China's overall layout.
In addition, judging from the current situation, the "small action" of the United States is not necessarily successful. China has become the world's second largest economy and has formed close economic ties with many countries. It is obviously unrealistic for the United States to persuade these countries to completely turn to it by means of pressure or co-opt. China's Belt and Road Initiative emphasizes win-win cooperation rather than a zero-sum game, which is why many countries are willing to participate in it.
To sum up, Panama's sudden announcement of its withdrawal from the Belt and Road Initiative is the result of a trick behind the US. Although this incident has brought some challenges to China's diplomatic and economic layout, it will not shake China's global strategy. China can respond to this situation by strengthening cooperation with other countries. And the "small actions" of the United States may eventually backfire and make more countries see their true colors. International politics is always a complicated game, and Panama's "change of face" is only a small episode in it, and the real drama is still to come.
