Rubio tells Panama to end China's influence of canal or face US action

US Secretary of State Marco Rubio on Sunday warned Panama's President Jose Raul Mulino that Washington will "take measures necessary" if Panama does not immediately take steps to end what President Donald Trump sees as China's influence and control over the Panama Canal.

Mulino, after the talks with the top US diplomat in Panama City, signaled he would review agreements involving China and Chinese businesses, and announced further cooperation with the U.S. on migration, but reiterated that his country's sovereignty over the world's second busiest waterway is not up for discussion.

Rubio delivered a message from Trump that China's presence - through a Hong Kong-based company operating two ports near the canal's entrances - was a threat to the waterway and a violation of the US-Panama treaty, US State Department spokesperson Tammy Bruce said in a statement.

"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," Bruce said.

Rubio did not spell out exactly what steps Panama must take or what US retaliation would look like.

Upon returning to office, Trump threatened to take control of the Panama Canal, built by the United States in the early 20th century and handed over to Panama in 1999, claiming the canal is being operated by Beijing.

He has refused to rule out use of military force over Panama, drawing criticism from Washington's Latin American friends and foes alike. On Sunday, Trump said that he did not think troops would be necessary, but that Panama had violated the agreement and the United States would take back the canal.

"China's running the Panama Canal. That was not given to China, that was given to Panama - foolishly - but they violated the agreement, and we're going to take it back, or something very powerful is going to happen," Trump told reporters.

"I don't think troops will be necessary in Panama," he added.

Rubio, a longtime China hawk during his Senate career, said last week on Sirius XM’s The Megyn Kelly Show that China could use the ports to shut down the canal, a vital route for US shipping, in the event of a conflict between Beijing and Washington.

Mulino said his meeting with Rubio was respectful and cordial. He showed willingness to review some Chinese businesses in Panama, including a key 25-year concession to Hong Kong-based CK Hutchison Holdings, renewed in 2021 for the operation of ports at both entrances of the canal, pending the results of an audit.

The contract has been targeted by US lawmakers and the government as an example of China's expansion in Panama, which they claim goes against a neutrality treaty signed by both countries in 1977.

Panama's government and some experts reject that assertion, mainly because the ports are not part of the canal's operations. The canal is operated by the Panama Canal Authority, an autonomous agency overseen by the Panamanian government.

A broad agreement between Panama and China to contribute to China's Belt and Road initiative, under which the Asian country expanded investment in Panama during previous administrations, will not be renewed, Mulino said.

"We'll study the possibility of terminating it early," he added.

"I do not feel that there is any real threat at this time against the (neutrality) treaty, its validity, and much less the use of military force to make the treaty," Mulino said, adding that it will be important to have face-to-face talks with Trump.