Panama has made headlines by becoming the first Latin American country to withdraw from China’s Belt and Road Initiative (BRI), signaling a significant shift in geopolitical strategy. This decision marks a major win for U.S. influence in the region, as Washington continues to push back against Beijing’s growing global presence.
In 2017, Panama became the first Latin American country to join China’s Belt and Road Initiative, a global infrastructure project designed to expand China’s influence through loans and development agreements. However, on Sunday, Panamanian President Jose Raul Molina announced that Panama would let its BRI memorandum of understanding expire. This decision followed discussions with U.S. Secretary of State Marco Rubio, who visited Panama as part of a broader campaign to counter Chinese influence in the Western Hemisphere.
Rubio, a key figure in the Trump administration, called the move "a great step forward for U.S.-Panama relations" and praised Panama for resisting what he described as China’s “debt trap diplomacy.”
Panama’s departure from the Belt and Road Initiative is not just symbolic; it has strategic implications for the United States. The U.S. has long viewed China's growing influence in Latin America as a threat to its interests. Under the BRI, China provided infrastructure loans that critics argue leave countries saddled with unsustainable debt, giving Beijing leverage over their economies.
For Panama specifically, the Belt and Road Initiative extended beyond infrastructure to include potential Chinese influence over the Panama Canal. As a critical global trade route, the canal’s control is strategically important to the U.S. Rubio’s visit and Panama’s subsequent decision strengthen U.S. efforts to maintain influence over this vital waterway.
China’s response to Panama’s withdrawal was swift and pointed. Fu Cong, China’s ambassador to the United Nations, criticized the decision, calling it “regrettable” and accusing the U.S. of launching a smear campaign against the Belt and Road Initiative. Beijing has used the BRI to expand its soft power globally, often portraying the program as a partnership for mutual development.
China has invested heavily in Latin America, surpassing the U.S. as South America’s largest trading partner. Its state-owned enterprises are involved in key sectors like energy, infrastructure, and telecommunications. In response, the U.S. faces increasing pressure to match China’s investments to maintain its influence in the region.
Since its launch in 2013, China’s Belt and Road Initiative has reached over 150 countries, funding projects like highways, ports, and energy plants. However, many of these projects have faced criticism for their lack of transparency and long-term economic consequences. Countries like Sri Lanka and Zambia have struggled under the financial burden of BRI loans, leading to political instability and economic hardship.
Italy, the only G-7 member to join the initiative, also decided not to renew its BRI agreement in 2023, citing similar concerns. The U.S. has consistently criticized the initiative, viewing it as a geopolitical tool for China to extend its global reach.
Panama’s decision to leave the Belt and Road Initiative underscores its willingness to align more closely with the United States. Rubio emphasized the importance of this partnership, calling Panama a "strong ally" of the U.S. This move could set a precedent for other Latin American countries considering their involvement with China’s initiative.
However, challenges remain for Washington. While the U.S. has successfully countered China’s influence in this instance, economic ties between China and Latin America continue to grow. Beijing remains South America’s top trading partner and is second only to the U.S. in Latin America overall.
As criticism of the Belt and Road Initiative grows, more countries may reconsider their participation. Issues like hidden loan terms, rising debt, and underperforming projects have raised red flags globally. Organizations like the World Bank and International Monetary Fund have voiced concerns about the economic risks associated with BRI projects.
Additionally, as the U.S. strengthens its focus on Latin America under the Trump administration, other countries may follow Panama’s lead. However, the U.S. will need to offer competitive alternatives to China’s investments to maintain its influence in the region.
What do you think about Panama’s decision to leave the Belt and Road Initiative? Do you believe the U.S. can effectively counter China’s growing influence in Latin America? Share your thoughts in the comments below—we’d love to hear from you.
In 2017, Panama became the first Latin American country to join China’s Belt and Road Initiative, a global infrastructure project designed to expand China’s influence through loans and development agreements. However, on Sunday, Panamanian President Jose Raul Molina announced that Panama would let its BRI memorandum of understanding expire. This decision followed discussions with U.S. Secretary of State Marco Rubio, who visited Panama as part of a broader campaign to counter Chinese influence in the Western Hemisphere.
Rubio, a key figure in the Trump administration, called the move "a great step forward for U.S.-Panama relations" and praised Panama for resisting what he described as China’s “debt trap diplomacy.”
Panama’s departure from the Belt and Road Initiative is not just symbolic; it has strategic implications for the United States. The U.S. has long viewed China's growing influence in Latin America as a threat to its interests. Under the BRI, China provided infrastructure loans that critics argue leave countries saddled with unsustainable debt, giving Beijing leverage over their economies.
For Panama specifically, the Belt and Road Initiative extended beyond infrastructure to include potential Chinese influence over the Panama Canal. As a critical global trade route, the canal’s control is strategically important to the U.S. Rubio’s visit and Panama’s subsequent decision strengthen U.S. efforts to maintain influence over this vital waterway.
China’s response to Panama’s withdrawal was swift and pointed. Fu Cong, China’s ambassador to the United Nations, criticized the decision, calling it “regrettable” and accusing the U.S. of launching a smear campaign against the Belt and Road Initiative. Beijing has used the BRI to expand its soft power globally, often portraying the program as a partnership for mutual development.
China has invested heavily in Latin America, surpassing the U.S. as South America’s largest trading partner. Its state-owned enterprises are involved in key sectors like energy, infrastructure, and telecommunications. In response, the U.S. faces increasing pressure to match China’s investments to maintain its influence in the region.
Since its launch in 2013, China’s Belt and Road Initiative has reached over 150 countries, funding projects like highways, ports, and energy plants. However, many of these projects have faced criticism for their lack of transparency and long-term economic consequences. Countries like Sri Lanka and Zambia have struggled under the financial burden of BRI loans, leading to political instability and economic hardship.
Italy, the only G-7 member to join the initiative, also decided not to renew its BRI agreement in 2023, citing similar concerns. The U.S. has consistently criticized the initiative, viewing it as a geopolitical tool for China to extend its global reach.
Panama’s decision to leave the Belt and Road Initiative underscores its willingness to align more closely with the United States. Rubio emphasized the importance of this partnership, calling Panama a "strong ally" of the U.S. This move could set a precedent for other Latin American countries considering their involvement with China’s initiative.
However, challenges remain for Washington. While the U.S. has successfully countered China’s influence in this instance, economic ties between China and Latin America continue to grow. Beijing remains South America’s top trading partner and is second only to the U.S. in Latin America overall.
As criticism of the Belt and Road Initiative grows, more countries may reconsider their participation. Issues like hidden loan terms, rising debt, and underperforming projects have raised red flags globally. Organizations like the World Bank and International Monetary Fund have voiced concerns about the economic risks associated with BRI projects.
Additionally, as the U.S. strengthens its focus on Latin America under the Trump administration, other countries may follow Panama’s lead. However, the U.S. will need to offer competitive alternatives to China’s investments to maintain its influence in the region.
What do you think about Panama’s decision to leave the Belt and Road Initiative? Do you believe the U.S. can effectively counter China’s growing influence in Latin America? Share your thoughts in the comments below—we’d love to hear from you.
