China's fury over Trump's Panama victory: Beijing rages at US 'coercion' after losing major Canal deal
China has criticised what it called US 'coercion' after Panama declined to renew a key infrastructure agreement with Beijing following Donald Trump's threat to 'take back' the Panama Canal.
China's Foreign Ministry spokesman Lin Jian said at a briefing that China 'firmly opposes the US smearing and undermining the Belt and Road co-operation through means of pressure and coercion'.
The Belt and Road Initiative is President Xi Jinping's signature foreign policy drive to bind China closer to countries in the region and beyond by building roads, railways, airports, power plants and other infrastructure.
More than 20 Latin American nations are among the more than 150 countries that have participated in the Belt and Road Initiative, with results benefiting their people, Lin said.
But Panama on Thursday formally presented a document to exit the initiative, President Jose Raul Mulino said.
The decision comes days after US Secretary of State Marco Rubio warned the Panamanian leader on Sunday that Panama must immediately reduce what President Trump says is Chinese influence over the canal area or face potential retaliation from Washington.
'Beijing regrets Panama's decision,' spokesman Lin said, urging Panama to 'consider the broader bilateral relationship and the long-term interests of both nations' and 'resist external interference'.
Lin said the Belt and Road Initiative has brought 'active participation' from more than 150 countries and that it has brought 'fruitful results' to Panama and China, but gave no examples.
President of Panama Jose Raul Mulino speaks at the weekly press conference in Panama City, Panama, 06 February 2025
United States President Donald Trump says Panama must immediately reduce 'Chinese influence' over the canal area or face potential retaliation from Washington
An aerial view shows a vessel transiting along the Balboa Port, operated by Panama Ports Company, as U.S. President Donald Trump plans to regain control of the Canal, in Panama City, Panama, February 1, 2025
Since winning the US election in November, President Trump has refused to rule out the use of force to seize the canal built by Washington over a century ago and later handed over to Panama.
Around 40 percent of US container traffic passes through the narrow body of water linking the Caribbean Sea with the Pacific Ocean, making it one of the world's most important trade routes.
At present, canal operations on both sides of the canal are managed by the Hong Kong-based Hutchison Ports company, which was recently given a 25-year no-bid extension to run them.
Mulino says he has rejected pressure from the new US government to discuss ownership of the waterway, but some believe Panama may be open to a compromise that sees Hutchinson Ports lose their rights to manage canal operations.
An audit into the suitability of the 25-year, no-bid extension is already under way and could lead to a rebidding process.
Mulino also denied on Thursday the US State Department's claim that his country had reached a deal allowing US warships to transit the canal for free.
Mulino said he had told US Secretary of Defense Pete Hegseth on Wednesday that he could neither set the fees to transit the canal nor exempt anyone from them and that he was surprised by the US State Department's statement suggesting otherwise late Wednesday.
'I completely reject that statement yesterday,' Mulino said during his weekly press conference, adding that he had asked Panama's ambassador in Washington to dispute the State Department's statement.
A cargo ship sails under Las Americas bridge through the Panama Canal, in Panama City, Saturday, Feb. 1, 2025
Cargo containers sit stacked as cranes load and unload containers from cargo ships at the Cristobal port, operated by the Panama Ports Company, in Colon, Tuesday, Panama, Feb. 4, 2025
FILE PHOTO: U.S. President Donald Trump attends a bilateral meeting with China's President Xi Jinping
On Wednesday evening, the US State Department said via X that 'US government vessels can now transit the Panama Canal without charge fees, saving the US government millions of dollars a year.'
The Panama Canal Authority put out its own terse statement later Wednesday night saying it had 'not made any adjustments' to the fees.
Mulino said the US statement 'really surprises me because they're making an important, institutional statement from the entity that governs United States foreign policy under the president of the United States based on a falsity. And that's intolerable.'
US Secretary of State Marco Rubio, who met with Mulino and canal administrators and visited the critical trade route earlier this week, said on Thursday from the Dominican Republic that he had no confusion about his discussions with Panama, but 'I respect very much the fact that Panama has a process of laws and procedures that they need to follow.'
'The United States has a treaty obligation to protect the Panama Canal if it comes under attack,' Rubio said.
'That treaty obligation would have to be enforced by the armed forces of the United States, particularly the US Navy. I find it absurd that we would have to pay fees to transit a zone that we are obligated to protect in a time of conflict.'
Rubio had carried a message from Trump that China's influence at the canal was unacceptable.
Rubio had told Mulino that Trump believed that China's presence in the canal area may violate a treaty that led the United States to turn the waterway over to Panama in 1999. That treaty calls for the permanent neutrality of the American-built canal.
Chinese President Xi Jinping
US Secretary of State Marco Rubio addresses employees and families during a meet-and-greet at the United States Embassy in Panama City, on February 2, 2025
US Secretary of State Marco Rubio (L) talks to Panama Canal Authority Administrator Ricaurte Vasquez during a tour at the Miraflores locks of the Panama Canal in Panama City on February 2, 2025
Canal administrators said they were open to discussing giving US warships priority in crossing the canal, but did not say they had considered waiving fees.
Mulino said via X that he was scheduled to speak to Trump on Friday.
Since 1998, US warships, including submarines, have transited the Panama Canal 994 times.
They accounted for just 0.3% of the canal's traffic during that period. The canal received $25.4 million in total fees for those crossings, according to data from the canal authority.
The fees charged to US warships and those from other nations are based on the ship's displacement tonnage, or the weight of the water displaced by the vessel. The measure is different than that used to charge commercial vessels.
Mulino said Thursday that both Panama's constitution and laws regulating the Canal Authority make clear that neither the government nor the authority can waive fees. 'It's a constitutional limitation,' he said.
