Panama Pete – Sailing Right Along

With all that’s been going on in the world as far as trade wars, tariffs, and China, China, China, there hasn’t been much in the news about Panama.

That doesn’t mean nothing’s been happening, though.

In fact, Panama is turning into one more giant burr under Xi’s Mongolian camel blanket and Trump has to be tickled with the frustrations he’s successfully piling on his adversary’s plate like so many red, white and blue lo mein noodles.

Three weeks ago, with the mainland Chinese government basically scuttling the Hutchinson-Blackrock port deal and the Panamanians having already signaled in February that they would leave the Belt and Road Initiative (BRI), the Chinese were agitated enough to take a personal hand in the situation.

Beijing rustled up some senior Chinese diplomatic firepower and sent them off to the isthmus for ‘talks.’

China has sent a senior-level delegation to Panama at a time when relations have been clouded by developments surrounding the Panama Canal, a move seen by observers as an attempt to “understand what is unfolding” and possibly reverse the situation.

According to Chinese state news agency Xinhua, a delegation led by Ma Hui, a vice-minister of the Communist Party’s diplomacy arm, the International Department, visited the Central American country last week, holding talks with “leaders of major political parties” and think tanks.

Ma was quoted as saying that China was “willing to strengthen exchanges with Panama’s political parties and think tanks, enhance mutual understanding and trust, and consolidate the public support foundation for friendly China-Panama relations”.

In other words, drag the wandering and wavering Panamaians back into the fold.

There is a sense of urgency in Beijing about their enormous investments across the globe and the diminishing returns on what was once the ticket to securing a foothold on every continent and in practically every country that didn’t start with United and end in States.

For many of the countries that have had dealings with the BRI, the shine is starting to wear off. They have found they don’t like the way the CCP does business and they are looking for an exit ramp.

More than a decade after China launched the Belt and Road Initiative (BRI), its ambitious infrastructure and investment project that significantly broadened China’s economic and political influence worldwide and touted by President Xi Jinping as the “project of the century,” the BRI is losing steam. Far from being a path to global prosperity, the initiative has led to unsustainable debt, environmental damage, and has provided China with the potential to exert undue influence, raising questions about its benefits for participating countries.

In early February, Panama, the first Latin American country to join the BRI, announced its departure from the project and end all cooperation with China’s initiative. In making the announcement, Panama’s President Raul Mulino questioned the advantages of the BRI. “I do not know what was the intention of those who signed this [agreement] with China,” President Mulino said. “What has it brought to Panama all these years? What are the great things that this Belt and Road Initiative has brought to the country?”

More than a year prior, in December 2023, Italy withdrew from the BRI, citing that it had not yielded economic benefits and voicing concerns about the economic and political implications of the project, as well as fears about inappropriate technology transfer. In joining the BRI, Italy hoped to boost exports of Italian goods to China yet those remained a very small share of Italian exports, while import from China grew disproportionately, think tank Center for Strategic and International Studies indicated in a report.

Whatever assurances are made about intentions as they hand funds over to eager recipients, the Chinese are there for them, not for the host country, period.

This visit was a last effort to impress upon the small Central American country how friendly and benign Chinese intentions were.

Defense Secretary Pete Hegseth flew in for a visit with US troops in the area and talks with Panamanian officials a couple of days ago.

Secretary of Defense Pete Hegseth, @SecDef, meets U.S. #Marines with Marine Fighter Attack Squadron (VMFA) 312 at Panama Pacifico Airfield, Panama.

VMFA-312 continues day-to-day operations in support of an expanded strategic security partnership with Panama for the next week. pic.twitter.com/kEcbpnTcoL

— U.S. Marines (@USMC) April 10, 2025

Hegseth also gave a most excellent off-the-cuff speech to the crew of the USS Chosin.

And it seems the Panamanians were bowled over by both the charm offensive and the not-so-subtle reminder of who the big dog in town really was.

🚨 Defense Secretary Pete Hegseth visiting the Panama Canal:

“I want to be very clear: China did not build this canal, China does not operate this canal, and China will not weaponize this canal” pic.twitter.com/QvLaBQEDZg

— Raylan Givens (@JewishWarrior13) April 8, 2025

It didn’t take long for the dominos to fall in a most accommodating manner. 

The president of Panama himself released the official word that the country was officially done with the BRI.

🇵🇦🇺🇸🇨🇳 | URGENT

Panama breaks with China and aligns itself with the US: Mulino abandons the Silk Road, resumes military exercises with Washington, and joins forces with Hegseth to secure the Canal, curb migration, and contain the communist advance in the region. pic.twitter.com/CTWgT46JBv

— BowTiedMara (@BowTiedMara) April 9, 2025

Hegseth held a press conference to outline the understandings he would be signing for the United States with Panama, which included a momentous agreement for the framework that would allow United States warships to sail through the Panama Canal ‘first and free.’

BREAKING:🚨 IT’S OFFICIAL — AMERICA JUST TOOK BACK THE PANAMA CANAL 🚨

U.S. Defense Secretary Pete Hegseth just dropped the HAMMER:

🗣️ “We’ll be signing a Declaration… for U.S. WARSHIPS & AUXILIARY SHIPS to sail FIRST and FREE through the Panama Canal.”

🔥 FREE PASSAGE.
🔥… pic.twitter.com/xepezYguga

— Jim Ferguson (@JimFergusonUK) April 10, 2025

What a sea change in less than three months. Panama had initially balked at the concept after Rubio’s visit.

Defense Secretary Pete Hegseth announced Wednesday that U.S. and Panama officials would sign a “framework” agreement allowing U.S. warships to travel “first and free” through the Panama Canal. 

Hegseth said the two countries had already signed a memorandum of understanding on security cooperation and that they would finalize a document guaranteeing U.S. warships and auxiliary vessels priority, toll-free passage through the canal.

…To strengthen military ties with Panama and reassert influence over the canal, the U.S. will deploy the USNS Comfort, a Navy hospital ship, to the region.

Hegseth vowed Tuesday that the U.S. will “take back” the Panama Canal from Chinese influence, pointing to port operations controlled by Hong Kong-based CK Hutchison.

In an appearance with Trump upon his return, Hegseth ran through the joint agreements and memorandums they’d signed during his visit. Besides the ‘first and free,’ there was another with their security minister dealing with the presence of American troops. It appears that several old US bases and airfields will start seeing some rotational activity to counter any Chinese influence or expansion plans as well as for training purposes, all jointly with Panamanian forces.

Wow! A framework was established to allow American vessels to travel through the Panama Canal first and FREE

• In addition a memorandum of understanding for the presence of US Troops jointly with Panama to secure the Panama Canal away from Chinese Influence… pic.twitter.com/UnD7cb1BgQ

— MJTruthUltra (@MJTruthUltra) April 10, 2025

The Panamanians were pushing back some – no doubt they didn’t want to be seen as pushovers once Hegseth left. There’s no appetite for permanent American military installations in the country, for one thing. The rest of the objections seemed like semantic quibbles for face-saving as opposed to a direct refutation.

…His government quickly slapped down the idea. “Panama made clear, through President Mulino, that we cannot accept military bases or defence sites,” said Panama’s security minister, Frank Abrego, in a joint public appearance with Hegseth.

Hegseth also said the US was seeking an agreement under which its warships could pass through the canal “first, and free”.

Jose Ramón Icaza, Panama’s minister for canal affairs, said: “We will seek a mechanism by which warships and auxiliary ships can have a compensation system for services, that is, a way to make them cost-neutral but not free.”

The independent Panama Canal Authority (PCA) that manages the waterway said on Wednesday that it was seeking a “cost-neutral scheme” to compensate services rendered in security matters for warship tolls.

The government has also been actively going after the Hong Kong port operator in the middle of that contentious frozen sale deal.

…Under pressure from the White House, Panama has accused the Hong Kong-backed Panama Ports Company of failing to meet its contractual obligations and pushed for it to pull out of the country.

The company rejected an audit on Wednesday that suggested it had failed to pay $1.2bn due under its concession.

All in all, a pretty good weekend and showing for the SecDef and even better news for the country.

When that first and free US warship transits the Canal, those will be some pictures.

Xi will probably snap his chopsticks.