The Claim

Pressured Panamanian President José Raúl Mulino to withdraw from China’s Belt and Road Initiative, a debt-trap diplomacy scheme the Chinese Communist Party uses to gain influence over developing nations.

The Claim, Unpacked

What is literally being asserted?

Two factual claims and one characterization: (1) the Trump administration pressured Panama’s President Mulino, (2) that pressure caused Panama to withdraw from China’s Belt and Road Initiative (BRI), and (3) the BRI is a “debt-trap diplomacy scheme” used by the Chinese Communist Party to gain influence over developing nations.

What is being implied but not asserted?

That this was a clear-cut victory against Chinese expansionism — that Panama was ensnared in a predatory Chinese scheme and the U.S. liberated it. The framing implies the BRI was actively harmful to Panama, that China was using it to control Panama (and by extension the Canal), and that U.S. pressure was the decisive factor in the withdrawal. It also implies Panama was a passive actor responding to American leadership rather than a sovereign nation making its own strategic calculation.

What is conspicuously absent?

Several critical elements: (1) The nature of the “pressure” — including Trump’s threats to “take back” the Panama Canal by force, which Mulino called a “falsehood” and which violated Panama’s sovereignty under the 1977 Torrijos-Carter Treaty. (2) That Mulino denied U.S. pressure drove the decision, insisting it was sovereign. (3) That the BRI MOU signed in 2017 had produced remarkably little in Panama — Chinese FDI amounted to just 0.8% of Panama’s total in 2023, making the “debt trap” framing inapplicable to Panama specifically. (4) That CK Hutchison, the company operating canal-adjacent ports, is a private Hong Kong conglomerate — not a Chinese government entity — and has been present since 1997, long predating the BRI. (5) That Mulino was already skeptical of the BRI before Trump took office, and CSIS characterizes the withdrawal as part of a deliberate “Mulino Doctrine” of strategic hedging.

Evidence Assessment

Established Facts

Panama formally withdrew from the Belt and Road Initiative in February 2025. On February 6, 2025, President Mulino instructed Panama’s embassy in Beijing to submit the required 90-day notice of withdrawal from the BRI memorandum of understanding signed in 2017. Panama was the first Latin American country to both join (2017) and exit the BRI. Mulino publicly questioned the initiative’s value: “I do not know what was the intention of those who signed this agreement with China. 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?” ¹

The withdrawal announcement followed direct U.S. pressure, including Secretary of State Marco Rubio’s visit to Panama on February 2, 2025. The State Department stated that 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.” Trump had previously declared in his inaugural address on January 20, 2025, that “China is operating the Panama Canal, and we didn’t give it to China, we gave it to Panama, and we’re taking it back.” Rubio also made a false claim about U.S. toll-free transit rights, which Mulino called “intolerable” and a “falsehood.” ²

China’s actual investment under the BRI in Panama was minimal. Chinese FDI in Panama amounted to approximately 0.8% of total foreign direct investment in 2023, compared to 19.6% from the United States and 3.6% from Spain. Total Chinese FDI stock in Panama was approximately $1.4 billion in 2023. The BRI produced limited concrete results — a bridge contract won by China Harbour Engineering Company in 2018 and a convention center, but many planned projects “faced renegotiation or cancellation.” By contrast, the U.S. accounts for $3.8 billion in annual investment and 74% of canal cargo. ³

CK Hutchison Holdings is a private Hong Kong conglomerate, not a Chinese government entity. The company has operated ports at Balboa and Cristobal since 1997 — predating the BRI by two decades. U.S. intelligence assessments found “no information to substantiate allegations” that Hutchison is a front for the PRC government. The Panama Canal Authority (ACP) is an autonomous Panamanian entity that independently manages the canal’s operations. China does not operate or control the Panama Canal. ⁴

Mulino denied that U.S. pressure was the cause of the withdrawal. Mulino maintained that the decision was sovereign, stating he was not pushed by the United States to quit the BRI. However, the timing — announcing days after Rubio’s visit, which itself followed weeks of Trump’s threats to “take back” the canal — makes this denial difficult to accept at face value. Both China and multiple independent analysts attributed the move to U.S. coercion. ⁵

Strong Inferences

Mulino was already skeptical of the BRI before U.S. pressure, but the timing and pace of withdrawal were driven by U.S. threats. CSIS analysis describes a “Mulino Doctrine” of strategic hedging, noting that Mulino’s administration “had been evaluating withdrawal from the BRI as a policy option before Rubio’s February visit.” Mulino’s predecessor had already begun dialing back the China tilt, canceling a planned Chinese embassy near the canal entrance. The September 2024 Foreign Policy assessment identified Mulino as offering “new opportunities to the United States in competing with China” — months before Trump took office. The BRI withdrawal targeted an agreement that “had generated more headlines than infrastructure.” ⁶

The “debt-trap diplomacy” characterization is contested by significant scholarly research and does not fit Panama’s specific situation. Chatham House (2020), examining the most-cited cases including Sri Lanka, concluded that “the most controversial BRI projects were initiated by the recipient governments” and that debt problems “arose mainly from the misconduct of local elites and Western-dominated financial markets.” AidData’s research found that while 80% of Chinese government loans go to countries in debt distress, the patterns reflect poor coordination rather than deliberate strategic entrapment. For Panama specifically, Chinese lending was modest — individual identified loans include a $50 million water sanitation project through the IDB and a $24.45 million solar plant loan, not the massive sovereign debt burdens seen in countries like Sri Lanka or Zambia. Panama’s external debt is approximately $44.2 billion (2025), but Chinese bilateral lending represents a small fraction. ⁷

The U.S. pressure campaign involved implicit threats to Panama’s sovereignty that go well beyond normal diplomatic engagement. Trump’s inaugural statement about “taking back” the canal, Rubio’s warning of unspecified “measures necessary to protect its rights,” and false claims about toll-free transit rights represented coercive diplomacy directed at a treaty ally. The Carnegie Endowment characterized Panamanians as viewing “Trump’s challenge as a public test of Mulino’s capacity to govern in the interest of Panama.” This was not gentle persuasion — it was pressure backed by implicit military threats against a much smaller nation. ⁸

What the Evidence Shows

The factual core of this claim is substantially true: the Trump administration pressured Panama, and Panama withdrew from the BRI. The claim’s unusual candor in using the word “pressured” actually makes it more honest than many items on this list. Where it becomes misleading is in the characterization — both of the BRI as it applied to Panama specifically, and of the withdrawal as a straightforward American foreign policy victory.

The BRI in Panama was already a paper tiger. Chinese FDI was less than 1% of Panama’s total. The 2017 MOU produced minimal infrastructure. Mulino himself questioned what the initiative had ever delivered. The “debt-trap diplomacy scheme” characterization — while a defensible description of some BRI outcomes in Africa and South Asia — dramatically overstates what was happening in Panama. Panama was not trapped in Chinese debt. It was a middle-income country with a diversified economy that had signed a largely symbolic agreement during a prior administration’s diplomatic tilt toward Beijing.

The actual “pressure” involved was far more aggressive than the claim implies. This was not diplomatic persuasion — it was coercion backed by threats to Panama’s sovereignty over the canal. Trump publicly declared the U.S. would “take back” the canal. Rubio made false claims about treaty rights to toll-free passage. The State Department warned of unspecified “measures necessary.” For a small nation dependent on the canal for its economic existence, these were existential threats. Mulino’s subsequent denial of coercion is understandable — no sovereign leader wants to appear to have capitulated to threats — but the chronological record is clear.

The longer-term outcome reveals the complexity the claim hides. Panama’s January 2026 Supreme Court ruling declaring CK Hutchison’s port concession unconstitutional, followed by the transfer of port operations to Maersk and MSC, represented a far more consequential shift than the BRI withdrawal. But this was achieved through Panama’s own legal institutions, not American dictation — and it came nearly a year after the BRI exit. Meanwhile, the BlackRock deal to purchase Hutchison’s global port operations has stalled, with China’s state-owned Cosco demanding a majority stake, illustrating that U.S.-China competition over Panama’s infrastructure continues well beyond the symbolic BRI exit.

The Bottom Line

The claim is mostly true on its factual elements but misleading in its framing. Yes, the Trump administration pressured Mulino. Yes, Panama withdrew from the BRI. The claim even admits this was “pressure” rather than claiming the credit entirely, which is more honest than typical items on this list.

But the “debt-trap diplomacy scheme” characterization is inapplicable to Panama — where China’s actual investment was minimal and the BRI had delivered little. The withdrawal of a largely symbolic MOU is presented as liberation from a predatory scheme, when it was more accurately a small nation complying with superpower demands to exit a largely inactive agreement, under threats to its sovereignty over the canal. Mulino was already inclined to rebalance away from the BRI, but the specific timing and manner were driven by coercion — including threats that Mulino publicly called lies and that violated the spirit of the 1977 treaty. The real story is less about American leadership and more about American leverage, exercised against a treaty ally through threats rather than partnership.

Footnotes

1. South China Morning Post, “Panama formally exits China’s Belt and Road Initiative,” February 7, 2025; Foreign Policy, “Panama Leaves BRI, China Blames Trump’s Canal Threats,” February 7, 2025. ↩

2. PBS NewsHour, “Rubio presses Panama to reduce Chinese influence over its canal or face U.S. measures,” February 2, 2025; Fortune, “Panama will leave Beijing’s Belt and Road project,” February 2, 2025; Foreign Policy, February 7, 2025. ↩

3. The Conversation, “US pressure has forced Panama to quit China’s Belt and Road Initiative,” February 2025; Statista, China outward FDI stock in Panama 2023. ↩

4. Hong Kong Free Press, “What are Hong Kong’s links to the Panama Canal, and does China really control the waterway as Trump claims?” January 25, 2025; CSIS, “Chinese Ports in Panama Come Under New Management,” March 2025. ↩

5. South China Morning Post, February 7, 2025; Foreign Policy, February 7, 2025; Al Jazeera, “China slams US as Panama quits Belt and Road Initiative,” February 7, 2025. ↩

6. CSIS, “The Mulino Doctrine: How Panama Is Redefining Small State Strategy,” 2025; Foreign Policy, “Panama’s President Mulino Offers New Opportunities to the United States in Competing With China,” September 24, 2024. ↩

7. Chatham House, “Debunking the Myth of ‘Debt-trap Diplomacy,’” August 2020; AidData, “How China Lends: A Rare Look into 100 Debt Contracts with Foreign Governments,” 2021; AidData China project database. ↩

8. Carnegie Endowment, “The Crisis Trump Is Causing in Panama Will Reach Far Into Latin America,” February 2025; PBS NewsHour, February 2, 2025. ↩