by Martin Armstrong
Armstrong Economics
Panama was presented with an ultimatum to control foreign Chinese influence in the Panama canal or face retaliatory measures. While retaliatory measures were not specified, the State Department said that Panama was violating the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, and the US would move to protect itself. Secretary of State Marco Rubio met with Panamanian President José Raúl Mulino on Sunda,y and Panama caved to US pressure.
Panama is terminating standing agreements with the Chinese government before their initial end dates in 2027 and 2028. The “Belt and Road Initiative” (BRI) will not be renewed. Panama became the first Latin American nation to join the BRI in 2018 after cutting all diplomatic ties with Taiwan the year prior. China invested around $1.4 billion on infrastructure for the canal and port expansions. Panama said it will look into leaving the BRI earlier if possible.
