Secretary of State Marco Rubio suggested in a meeting with Panamanian President José Raúl Mulino on Sunday that the administration of President Donald Trump may move to seize the Panama Canal on the grounds that the Panamanian government has violated the agreement that gives the country control over the waterway.
Rubio arrived this weekend in Panama for his first overseas trip since being confirmed as America’s top diplomat, an indication that both he and the Trump administration would prioritize Latin America in their foreign policy. Rubio will travel to El Salvador, Costa Rica, Guatemala, and the Dominican Republic after his stop in Panama.
Trump began raising the issue of American national security threats at the Panama Canal during his time as president-elect, accusing Panama of allowing communist China to dominate traffic around the canal and claiming Panama was overcharging American ships to travel through there.
“Look, the Panama Canal is vital to our country. It’s being operated by China. And we gave the Panama Canal to Panama; we didn’t give it to China. And they’ve abused it,” Trump said shortly before taking office. “They’ve abused that gift.”
Panama took control of the Panama Canal, built by the United States prior to the establishment of the Panamanian state, under the 1978 Torrijos-Carter Treaties, a foreign policy priority for former President Jimmy Carter. The treaty requires Panama to keep the canal running as neutral territory without preference given to any foreign power and allows Washington to seize it if Panama violates the neutrality provision.
Rubio, the State Department said in a summary of his meeting with President Mulino, indeed confirmed to the Panamanian government that Trump believes the United States has a case to make that Panama broke the neutrality provision and Washington has a claim to the canal. The secretary of state told the president that Trump believed “the current position of influence and control of the Chinese Communist Party over the Panama Canal area is a threat to the canal and represents a violation of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal.”
“Secretary Rubio made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the Treaty,” State Department spokesperson Tammy Bruce relayed.
Rubio had made clear during his confirmation hearing that he had considered the possibility of a treaty violation.
“I’m compelled to respect that an argument could be made that the terms under which that canal were turned over have been violated, because, while technically, sovereignty over the canal has not been turned over to a foreign power, in reality, a foreign power possesses it through their companies,” Rubio told Congress.
The State Department readout did not elaborate on what sorts of measures the United States may take. Some options include taking the case to the International Court of Justice (ICJ) at the Hague, the U.N.’s top court for state parties to submit disputes, or the Permanent Court of Arbitration at the Hague, which similarly adjudicates state party cases. In late January, the Panamanian government sent a letter to U.N. Secretary-General Antonio Guterres in anticipation of such action, urging the United Nations to support Panama in the event that America challenged its control of the canal.
Mulino’s government has vehemently denied that it has allowed China undue influence over the canal and Mulino himself has said that any negotiation over control of the canal was “impossible.” In a press conference on Thursday in anticipation of Rubio’s arrival, Mulino insisted that there was no Chinese military presence at the Canal and urged the United States to offer him evidence if it existed.
“Regarding the Panama Canal… the first thing I want to say is that in these first months of serving I have not received from the U.S. embassy… absolutely any information regarding the alleged military presence of a foreign country in the Canal,” Mulino told reporters. “That information, if it existed, they kept it to themselves because they did not transmit it to us in an official way.”
“Panama controls the Panama Canal, and the administration of it has always been in Panamanian hands,” he reiterated.
The Panamanian office of the presidency did not indicate in its official statement on Mulino’s meeting with Rubio that the conversation was in any way hostile or confrontational. On the contrary, a readout from the office of the meeting said that Mulino himself found the conversation “highly respectful and cordial.” Mulino, who became president in 2024, is a conservative who won his election largely due to his promises to curb illegal mass migration in Panama’s Darién Gap, a deadly jungle region often used by human traffickers to bring migrants north from South America.
In a gesture intended to immediately address the White House’s concerns, Mulino announced that Panama would exit the Belt and Road Initiative (BRI), a Chinese communist global infrastructure initiative in which China offers predatory loans to poor countries intended to erode their sovereignty.
“Panama committed to not renew the memorandum of understanding signed with the People’s Republic of China,” the Panamanian government readout of the meeting detailed. “It was also determined that a Panama Canal Authority technical team will host officials designated by the government of the United States to clarify all doubts regarding the operations of that aquatic way.”
Mulino told reporters, “I understand that this is a concern of President Donald Trump’s” and indicated that he made the move against Chinese interests to directly address the Canal as a White House concern.
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