The US State Department announced on Wednesday that Panama has agreed to eliminate fees for US government vessels transiting the Panama Canal, a move that is expected to save the US government millions of dollars annually.
In a post on X, the US State Department stated:
“US government vessels can now transit the Panama Canal without charge fees, saving the US government millions of dollars a year.”
This decision follows US Secretary of State Marco Rubio’s February 1 visit to Panama, his first trip abroad since assuming office as America’s top diplomat.
Trump’s Strong Stance on the Panama Canal
Following his 2024 election victory, President Donald Trump had warned of potential US intervention in the Panama Canal, criticizing the excessive fees charged to US ships.
In November 2024, Trump wrote on Truth Social:
“Our Navy and Commerce have been treated in a very unfair and injudicious way. The fees being charged by Panama are ridiculous.”
The US played a crucial role in building the Panama Canal in 1914 and controlled its surrounding territory for decades. However, the US fully handed over control to Panama in 1999 after a period of joint administration.
Concerns Over China’s Influence on the Canal
Beyond the fees issue, Rubio raised alarms about China’s growing control over the canal, calling it “unacceptable.”
During a February 2 meeting in Panama City with Panamanian President Jose Raul Mulino and Foreign Minister Javier Martinez, Rubio conveyed Trump’s concerns about China’s increasing presence in the region.
According to State Department spokesperson Tammy Bruce:
“President Trump has made a preliminary determination that the current position of influence and control of the Chinese Communist Party over the Panama Canal area is a threat.”
Rubio warned that if immediate changes were not made, the US would take necessary measures to protect its rights under the Treaty on the Permanent Neutrality and Operation of the Panama Canal.
Potential Geopolitical Implications
- US-Panama Relations: The agreement to remove fees signals a diplomatic win for the Trump administration, reinforcing US influence in Panama.
- China’s Role in Latin America: With the US raising concerns over China’s growing economic presence, tensions between Washington and Beijing could escalate.
- Future of the Panama Canal: Given its strategic importance for global trade, the canal may remain a geopolitical flashpoint between US, China, and Panama.
As the Trump administration intensifies its focus on border security, trade policies, and foreign influence, the Panama Canal agreement marks another step in its aggressive diplomatic and economic approach.