With Trump’s canal demands on the table, Rubio tries to focus on China on Panama trip

A key focus of Secretary of State Marco Rubio’s visit to Central America this week will be to counter China’s growing influence in the region, the State Department’s top spokesperson said this week — even as President Trump’s comments on retaking the Panama Canal have roiled bilateral relations.

Mr. Rubio will visit Costa Rica, the Dominican Republic, El Salvador, Guatemala and Panama. The China factor is expected to be most prominently on the table in Panama, where he will discuss growing U.S. concerns regarding China’s influence over the canal.

State Department spokeswoman Tammy Bruce said that Mr. Rubio hopes to rekindle trust between the two nations while in Panama, trust that has strained by the canal controversy, without making unilateral demands.  

“I think it’s clear this is an issue about developing a relationship,” Ms. Bruce told Fox Business. “Not about bossing other nations around, but making it clear that a partnership with the United States is something that they can trust, something that comes with benefits just like any good relationship does.”

Mr. Trump’s has justified his intention to “take back” the Panama Canal — asserted even in his inaugural address last week — in part on what he says is outsized Chinese influence, including contracts held by a Hong Kong-based firm to manage key ports at either end of the waterway. According to the president, Panama has broken the neutrality pledge it signed in 1999 when the U.S. formally handed over control of the canal back to the nation.

“China is operating the Panama Canal,” Mr. Trump said in his inaugural speech. “And we didn’t give it to China, we gave it to Panama. And we’re taking it back.”

Mr. Trump has claimed that U.S. ships are charged more than Chinese vessels, which he blames on Beijing, and in a press conference before being sworn in refused to rule out U.S. military action to reclaim control of the canal. 

Panama has forcefully rejected Mr. Trump’s claims, asserting that Panama still controls the canal in a letter to the U.N.’s secretary-general. The country also announced that it would conduct an “exhaustive audit” of the Panama Ports Company, the local subsidiary of Hong Kong shipping firm CK Hutchison Holdings.

Panamanian President Jose Raul Mulino said on X on Monday that Panama has administered the canal responsibly for world trade, and that the canal “is and will continue to be Panamanian.” Asked about Mr. Trump’s remarks at the recent Davos global investor summit, he replied only, “Be serious.”

Since he was nominated to lead the State Department, Mr. Rubio has echoed Mr. Trump’s claims about Chinese control of the canal. During Mr. Rubio’s confirmation hearing earlier this month, he added nuance to the president’s claims.

“Because while technically, sovereignty over the canal has not been turned over to a foreign power, in reality, a foreign power today possesses, through their companies, which we know are not independent, the ability to turn the canal into a choke point in a moment of conflict, and that is a direct threat to the national interest and security of the United States.”

Mr. Rubio is not the only official to sound the alarm. U.S. Army Gen. Laura J. Richardson, commander of the Pentagon’s Southern Command, voiced similar concerns about a possible shutdown of crucial ports in Panama last year.

“These are state-owned enterprises by a communist government and I’m worried about the flipping of that to a military application very quickly if something were to happen, maybe in the Indo-Pacom region,” she said at last year’s Aspen Security Forum.

China has rapidly expanded its influence in South and Central America over the past decade, investing hundreds of billions of dollars to create beneficial infrastructure and foster trade. In nations across the region, China has replaced the U.S. as the leading trading partner.

Over the past 10 years, trade between China and Latin America has risen by 7% each year, raising the trade volume between the two regions from $261 billion to $489 billion from 2021 to 2023.

This has been helped, in part, by China’s Belt and Road initiative, a global infrastructure development program that has invested nearly $600 billion in the region. Latin America has accounted for over 21% of China’s overseas investment, with the country focusing on creating a vast infrastructure network to support Beijing’s economic goals.

Over the past few years, China invested $3.5 billion to build the port of Chancay, a Peruvian facility that Beijing expects to cut shipping time and costs. Additionally, the country has invested over $80 billion to support the construction of a rail link between Peru and Brazil.

The line is expected to link the Pacific and Atlantic oceans of the continent, bypassing the Panama Canal and expediting the transfer of raw materials from South America to China.