Panama on Thursday formally pulled out of China’s ambitious Belt and Road infrastructure program in a move seen as part of the effort to iron out differences with the Donald Trump-led US government.
The Trump government was hostile towards the South American nation, citing Beijing’s influence on the Panama Canal.
President Jose Raul Mulino told news agency AFP that the Panamanian Embassy in Beijing had given China the required 90-day notice of its decision not to renew its involvement in the plan.
Mulino also denied the US State Department’s claim that his country had reached a deal allowing Washington’s warships to transit the Panama Canal for free.
Mulino said he had told US Secretary of Defense Pete Hegseth on Wednesday that he could neither set the fees to transit the canal nor exempt anyone from them and that he was surprised by the US State Department’s statement suggesting otherwise late Wednesday, reported news agency AP.
“I completely reject that statement yesterday,” Mulino said during his weekly press conference, adding that he had asked Panama’s ambassador in Washington to dispute the State Department’s statement.
Earlier, the United States announced Wednesday that its government vessels would now transit the Panama Canal without charge, after intense pressure from President Trump.
“US government vessels can now transit the Panama Canal without charge fees, saving the US government millions of dollars a year,” the state department posted on social media platform X.
Since his election victory in November, Trump has refused to rule out military action to secure the canal, through which 40 per cent of US container traffic flows.
Last month, Trump doubled down on plans his plans to pursue plans to control the Panama Canal and Greenland.
Trump refused to rule out the use of military or economic coercion to achieve these objectives, stating their importance for the United States’ “economic security“.
His comments were made during a press conference at Mar-a-Lago a day after Congress certified his 2024 electoral victory.