Trumponomics appears to be tarnishing the fundamental principles of international economics and the trading system, attempting to reshape both with whimsical orientations. Following a series of high tariffs, Donald Trump has specifically targeted the Chinese BRI, labelling it a coercive project and a source of debt-trap diplomacy. As a result, Trumponomics has pressured Panama into leaving the BRI, marking a severe politicization against China and its strategic interests. This development raises concerns that many countries in Africa, the Middle East and Central Asia could also come under similar pressure.
In real terms, China and Panama are natural partners in the BRI, as Panama’s development relies on connectivity. Over the past one and a half years, their bilateral relationship has strengthened, bringing tangible benefits to both nations. Additionally, Panama was the first country in the Latin American and Caribbean region to sign a memorandum of understanding on the BRI with China. China is still willing to reinforce the strategic coordination with Panama to benefit the people of both countries better.
While visiting Panama, President Xi of China forwarded four proposals bringing the two countries closer, including understanding and supporting each other’s core interests and major concerns, working together to build a new type of international relationship and a community with a shared future for humanity and striving for an open global economy. The proposals also include making the BRI the centre of their collaboration and a call for more exchanges in various fields to enhance China-Panama friendship.
The BRI is witnessing growing partnerships around the world. So far, more than 150 countries and over 30 international organizations have signed the BRI agreements, with the initiative extending from the Eurasian continent to Africa and Latin America. Interestingly, since 2013, multiple countries and regions have forged synergy between their development strategies and the BRI, including Kazakhstan’s Bright Path economic policy, Mongolia’s Steppe Road Program, Saudi Arabia’s “Vision 2030,” the construction of the Eurasian Economic Union by Russia and the African Union’s Agenda 2063 showing multidimensional utility, scope and strategic importance of the BRI for regional peace, economic stability, sustainability and trans-regional connectivity in the world.
With the alignment of these strategies with the BRI, a number of flagship projects have been completed, converging dynamics of development for the countries involved. Evidently, championing the principles of consultation, cooperation and shared benefits, the BRI supports equal participation of all countries in decision-making, regardless of size, thus promoting the democratization of international relations.
The Chinese Foreign Ministry has strongly opposed the U.S. smear campaign aimed at sabotaging BRI cooperation through pressure and coercion, expressing deep regret over Panama’s decision not to renew the Memorandum of Understanding on the BRI. Lin rightly described the BRI as an economic cooperation initiative involving over 150 countries, including more than 20 from Latin America and the Caribbean, bringing tangible benefits to many, including Panama. In recent years, China-Panama cooperation under the BRI has yielded fruitful outcomes, continuing to benefit both nations. Lin expressed hope that Panama would prioritize its long-term bilateral relations, avoid external interference and make the right decision. Meanwhile, Panama denied a US State Department claim that it had agreed to exempt US government ships from transit fees through the Panama Canal.
Commenting on the Panama Canal issue, Chinese Foreign Ministry spokesperson Guo Jiakun said “China respects Panama’s sovereignty over the canal and recognizes it as a permanently neutral international waterway. But most recently, Panama’s President Jose Raul Mulino said his country has formally lodged a notice that it will leave the project. The announcement followed a visit by US Secretary of State Marco Rubio, who also toured the Panama Canal. President Donald Trump has repeatedly accused Panama of ceding control of the strategic waterway to China, despite denials from both countries. Mulino denied that the US had pushed Panama to make the move to quit the BRI. Rubio, who had threatened action against Panama unless it made immediate changes to reduce Chinese influence on the canal, hailed the announcement as a “great step forward” for bilateral relations.
The Chinese Assistant Minister for Foreign Affairs, Zhao Zhiyuan, met with Panamanian Ambassador to China Miguel Humberto Lecaro Barcenas, lodging a serious representation over Panama’s decision to cease the Memorandum of Understanding on BRI cooperation. Expressing deep regret, Zhao highlighted that China-Panama cooperation under the BRI has expanded rapidly across various fields, bringing tangible benefits to Panama and its people. He reaffirmed China’s respect for Panama’s sovereignty and territorial integrity, emphasizing equality among nations, mutual respect, and adherence to commitments. Strongly opposing U.S. attempts to undermine China-Panama relations, Zhao condemned efforts to disrupt BRI cooperation through pressure and threats, stressing that the China-Panama relationship is not targeted at any third party and should remain free from external interference. He expressed hope that Panama would make the right decision based on the broader bilateral relationship and the long-term interests of both nations.
In summary, as predicted, the rise of Trumponomics is now polluting international economics, trade, manufacturing, and, last but not least, global supply chains under the pretext of the “US First Policy” and “Protectionism.” The Panama Canal remains a strategic point for Latin America and the U.S., which seeks to maintain control over it as a gateway to South America.
There is no truth to claims that the canal is in Chinese hands due to their investments in the region. The narrative that China poses a threat to the canal and the people of Panama is being deliberately propagated. However, the only nation that has historically maintained a military presence in the Canal Zone and has previously shut it down is the US. The Chinese are not perceived as a threat by Panamanians.
Chinese investments in Panama in recent years have included bridges, a rail line, commercial ports, and a cruise ship terminal. One of the most significant projects proposed during Varela’s administration was the Panama Colón Container Port, a new facility strategically located at the canal’s Caribbean entrance. It promised to significantly enhance trans-shipment capacity following the 2015 expansion of the canal’s locks. A consortium of Chinese companies, led by Landbridge Group, pledged an estimated $900 million investment in the project.
There are growing concerns that Trumponomics will bring economic downturns rather than growth in global markets. In response, Chinese policymakers should initiate a “BRI Development Diversification Policy” through rigorous economic, political, and social diplomacy to safeguard and advance the BRI.
