Panama Says It Won't Renew 'Belt And Road' Memorandum With China After Marco Rubio Visit

The Panamanian Government announced it will not renew a memorandum of understanding with China regarding its "Belt and Road Initiative," the country's project to finance infrastructure projects across several continents, a day after U.S. Secretary of State Marco Rubio warned its president to reduce influence from the Asian country around the canal or face consequences.

"The memorandum of understanding from 2017 regarding the Belt and Road Initiative won't be renewed by my government. We will study the possibility that it can be finished sooner but I think it will be done in a year or two because renewals take place every three years," said Jose Raul Mulino.

According to France24, which quotes local outlet La Prensa, the countries agreed to cooperate on infrastructure connectivity, trade, and the union of their people's wills.

Mulino added that U.S. warships will be granted free passage through the canal, with the authority saying it will "optimize transit priority" through the waterway. The announcement follows a complaint by President Donald Trump, who said the U.S. Navy was paying "exorbitant" rates to go through.

While Trump made threats of taking control of the canal from the Panama Canal Authority, Mulino said Rubio made "no real threat of retaking the canal or the use of force."

The State Department had anticipated that Rubio's visit to the Central American country was focused on countering China's influence. Even though the Panama Canal is run by an autonomous entity overseen by the Panamanian government, the U.S. government claims China exerts influence through a Hong Kong-based company which operates ports on both ends of the waterway.

During his inauguration speech, Trump vowed to take back the Panama Canal. The president claimed that the U.S. has "been treated very badly by this foolish gift that should have never been made," referring to an agreement with the Latin American country that would eventually lead to Panama retaining full control of the canal.

In a post on Truth Social last week, Trump claimed that 64% of the signs in the canal zone were in Mandarin and that Panama was rapidly removing them in response to scrutiny. "Panama is trying at great speed to eliminate the 64% of signs written in Chinese. They are all over the zone because China controls the Panama Canal. PANAMA WILL NOT GET AWAY WITH THIS!" Trump wrote, attaching a photo of a Bank of China advertisement near the canal. The president did not provide a source for his assertions.

The government of Panama filed a complaint to the United Nations following Trump's threat, referring to an article of the UN Charter precluding any member from "the threat or use of force" against the territorial integrity or political independence of another.