The US State Department announced on Wednesday that Panama has agreed to waive fees for US government vessels transiting the Panama Canal, a decision expected to save the US government millions of dollars annually. This development follows US Secretary of State Marco Rubio’s visit to Panama on February 1, marking his first trip as the nation’s top diplomat.
In a statement shared on social media platform X, the US State Department wrote, “US government vessels can now transit the Panama Canal without charge fees, saving the US government millions of dollars a year.” The move is seen as a significant step in strengthening bilateral relations between the two nations, particularly as the US looks to ensure its continued influence in the region.
The agreement comes after a period of heightened tensions surrounding the Panama Canal, one of the world’s busiest and most strategically important waterways. In November, President Donald Trump had voiced frustration over the canal’s fees, accusing Panama of charging excessive rates for US ships passing through the passage. On his Truth Social platform, Trump labelled the fees “ridiculous,” adding that both the US Navy and the US commercial sector were being treated unfairly by Panama.
The Panama Canal has long been a focal point of US foreign policy. Built largely by the United States and completed in 1914, the canal and the territory surrounding it were under US control until 1999, when the US officially handed over control to Panama after a period of joint administration. However, the issue of fees and control over the canal has remained a point of contention in US-Panama relations, particularly in the context of China’s growing influence in the region.
During his trip, Secretary of State Rubio raised concerns about China’s increasing presence in the region, particularly in relation to the Panama Canal. Rubio had previously warned Panama about China’s influence, calling it “unacceptable” and stating that the US would take “necessary measures” if the situation did not change. In meetings with Panamanian President Jose Raul Mulino and Foreign Minister Javier Martinez on February 2, Rubio conveyed Trump’s concerns about China’s role in the canal area.
A statement from State Department spokesperson Tammy Bruce further clarified the US position, noting, “US President Donald 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.” The statement added that Rubio had emphasised the urgency of addressing the situation, indicating that without immediate changes, the US would consider taking measures to protect its interests under the Treaty concerning the Permanent Neutrality and Operation of the Panama Canal.
The Panama Canal has always been of immense strategic and economic importance, both for the US and the global economy. As the primary route for ships transiting between the Atlantic and Pacific Oceans, the canal plays a pivotal role in international trade, with approximately 12,000 vessels passing through annually. The US government’s interest in ensuring its free and unimpeded access to the canal is therefore seen as essential for maintaining its naval and commercial interests.
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The recent agreement to eliminate fees for US government vessels comes at a time when the US is carefully monitoring the broader geopolitical dynamics in the region. China’s growing investments in infrastructure and trade in Latin America have raised alarms in Washington, with concerns that Beijing is seeking to expand its influence over critical maritime routes like the Panama Canal. By securing a fee exemption, the US is reaffirming its commitment to maintaining its strategic presence in the region.
While the removal of transit fees is a significant win for the US government, questions remain about the long-term implications of the evolving relationship between Panama, the US, and China. Rubio’s visit underscores the delicate balance Panama must strike between cultivating relations with the US, a long-time partner, and managing its growing economic ties with China.
In conclusion, Panama’s decision to eliminate fees for US government vessels transiting the Panama Canal is a noteworthy development in US-Panama relations, with implications for broader geopolitical dynamics in the region. As the US seeks to maintain its influence over the canal and counter China’s growing presence, the issue of fees and control is likely to remain a key point of focus in the years ahead.
