MercoPress. South Atlantic News Agency

Panama drops the Chinese Belt and Road Initiative, but also rejects free transit of US vessels through the Canal

President Mulino announced on Thursday that Panama will withdraw from the Belt and Road Initiative, a trillion dollars funded global project

Panama’s President, José Raúl Mulino, announced on Thursday that the country will withdraw from the Belt and Road Initiative, the ambitious Chinese project to fund infrastructure to improve connectivity and economic cooperation with other nations. At the same time US Secretary of State Marco Rubio clarified the claim that Panama “had decided to remove fees for US government vessels transiting the Panama Canal”

Panama’s decision to leave the Chinse trillion dollars project comes amid pressure from U.S. President Donald Trump, who has threatened to take control of the Panama Canal, claiming that the waterway is under Chinese influence.

Mulino stated that Panama’s embassy in Beijing has “submitted the corresponding document” to “announce the cancellation 90 days in advance,” as the agreement requires.

He denied that the decision was made under U.S. demands—last week, U.S. Secretary of State Marco Rubio met with the Panamanian president in Panama City. Mulino added that such a statement from the State Department was “intolerable” and an “absolute falsehood”.

“I must reject this State Department statement because it is based on a falsehood. (…) This is intolerable, simply intolerable. And today, Panama is making it clear to the world that I reject continuing bilateral relations based on lies and falsehoods,” Mulino declared.

And in the Dominican Republic, during a press conference, Rubio explained that the US “expects” Panama to remove the fees but emphasized that the country’s process of laws and procedures must be respected.

“I respect very much that Panama has a process. They're a democratically elected government, they have rules, they have laws. They're going to follow their process, but our expectations remain the same,” he said.

The clarification came after the US State Department issued a statement on X Wednesday claiming that US government vessels could now transit the Panama Canal without charge fees, potentially saving millions of dollars annually. The statement was quickly contested by Panama’s leadership.