The dispute over the Panama Canal continues – a geopolitical clash that could change global trade

On Thursday, February 1, 2025, the US State Department announced a groundbreaking agreement that would allow the American military fleet to navigate the key global trade route free of charge. A few hours later, the authorities of Panama firmly denied the claims, calling them an unacceptable manipulation of facts. President José Raúl Mulino emphasized that his government had not agreed to such an arrangement. Is this a diplomatic mistake or a deliberate political maneuver? The stakes are high – at the center of the dispute are US strategic interests, Panama’s sovereignty, and global tensions over freedom of navigation.

Panama denies agreement with the US

Panama’s president, José Raúl Mulino, strongly stated that his government had not accepted the exemption of US military ships from transit fees through the Panama Canal. He stressed that such a decision would require the approval of the canal’s board and must comply with Panama’s constitution, which guarantees the neutrality of the waterway. A similar stance was presented by Panama’s foreign minister, Javier Martínez, who pointed out that any changes in the canal’s usage rules must be transparent and in line with international treaties. “We cannot allow outsiders to make decisions for us,” Martínez emphasized.

The dispute over the Panama Canal – why does the US want free access?

US authorities argue that their military vessels should be allowed to navigate freely through the Panama Canal because America has guaranteed its security for decades. Senator Marco Rubio called the idea of charging US ships an “absurdity” and reminded that Washington has long protected the canal from geopolitical threats.

However, the real reason behind US pressure on Panama may be something else – China’s growing presence in the region. Beijing has been increasing its influence in Latin America for years, with a particular focus on critical infrastructure for global trade.

China strengthens its position in the Panama Canal

China has been investing billions of dollars in the region for a long time. As early as 1997, the Chinese company Hutchison Ports took control of ports on both sides of the Panama Canal. Additionally, Beijing has engaged in port infrastructure modernization and the construction of logistics centers, raising concerns in Washington.

The Trump administration repeatedly highlighted China’s growing influence over key global shipping routes, pointing to the possibility of gradually taking actual control of the Panama Canal. According to some analysts, fears of Beijing’s expansion are the key factor driving the US to intensify its actions in Panama. Amid escalating geopolitical rivalry, Washington seeks not only to maintain its historical position in the region but also to secure one of the world’s most important trade routes.

What’s next for the Panama Canal?

According to media reports, Panama is officially withdrawing from China’s Belt and Road Initiative (BRI), signaling a significant shift in its foreign policy. This decision, aligned with rising geopolitical tensions, was confirmed by President José Raúl Mulino, who announced that the country would not extend the cooperation memorandum under the BRI, signed in 2017.

Panama’s move is not merely a formality – it is the first such decisive withdrawal from the BRI in Latin America, which could significantly impact its relations with both China and the United States. The Panamanian embassy in Beijing officially informed the Chinese government of the decision with the required 90-day notice, reinforcing its irreversible nature.

This is a pivotal moment for the region, one that could redefine the balance of power around the Panama Canal. While the consequences of this move remain uncertain, one thing is clear – Panama is sending a signal that both Beijing and Washington will read with the utmost attention.