Panama Gives In To Trump, Will Let U.S. Navy Ships Pass Canal For Free

Panama offered free passage to U.S. Navy vessels traveling through the Panama Canal following a meeting between Secretary of State Marco Rubio and Panamanian President José Raúl Mulino on Sunday, according to a senior Trump administration official.

The move will save the United States between $2.5 million and $3 million a year. Reducing the cost of using the canal has been a priority for President Donald Trump, who in December slammed the “exorbitant” rates Panama charged the Navy for passage.

During a tour of the canal, the Panama Canal Authority told Rubio that it would work with the United States to “optimize transit priority of U.S. Navy vessels,” according to a statement from the authority.

Fifty-two percent of transits through the canal have ports of origin or destinations in the United States, according to the authority.

Rubio on Sunday gave Mulino an ultimatum over China’s growing influence over the Panama Canal in a face-to-face meeting.

According to State Department Spokesperson Tammy Bruce, Rubio informed Mulino that Trump has made a preliminary determination that the Chinese Communist Party’s “position of influence and control” over the Panama Canal is 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,” the statement said.

On Sunday night, Mulino announced that his country would not be renewing its agreement with China’s Belt and Road Initiative, and would look into ending the agreement earlier than the set end date.

NEW: After meeting with @SecRubio today, Panama’s president announced the country will not be renewing its memo with China on its Belt and Road Initiative.

Panama will also look into ending the agreement earlier than the set end date. pic.twitter.com/g7WF0w9WhT

— Kassy Akiva (@KassyAkiva) February 2, 2025

“One important thing, which is a decision I made and communicated to him, is that the 2017 memorandum of understanding on the Silk Road, part of the Belt and Road Initiative, will not be renewed by my government,” Mulino said. “We are going to study the possibility of whether it can be ended earlier or not.”

Trump has pressured Panama to reduce Chinese influence over the canal or face the United States retaking control. Trump argued that this influence could result in the canal being closed off to the United States, posing a threat to national security and violating the treaty. He also pointed out that the United States was instrumental in building the canal, with many Americans losing their lives during its construction.

The United States ceded the canal to Panama in 1999, pursuant to a 1977 treaty signed by President Jimmy Carter.

Mulino has maintained that Panama controls the canal despite a Hong Kong company operating ports at both sides of the canal.