US Secretary of State Marco Rubio has called on Panama to diminish Chinese influence over the Panama Canal, warning of possible US repercussions if changes are not made. He delivered these comments in Panama City on Sunday during his inaugural overseas trip as Secretary of State.

In discussions with Panamanian President Jose Raul Mulino and Foreign Minister Javier Martinez-Acha, Rubio expressed President Donald Trump’s apprehensions regarding Panama’s potential breach of the 1977 treaty with the US, which ensures the canal’s permanent neutrality.

“This current situation is unacceptable, and without prompt adjustments, the United States may need to take necessary actions to safeguard its rights under the Treaty,” Rubio stated to Mulino, as outlined in a summary provided by the US State Department.

Mulino characterized the discussions as “respectful” and “constructive,” acknowledging Washington’s concerns but asserting that he did not see an imminent threat of US retaliation.

“I do not perceive any genuine threat at this moment against the treaty, its legitimacy, or any likelihood of military action to take control of the canal,” Mulino informed reporters following the meeting. “The technical team can engage with the United States to address any uncertainties they may have,” he continued, dismissing the possibility of negotiations regarding the canal’s ownership.

In a move to appease the United States, Mulino declared that his administration would refrain from renewing its 2017 agreements with China related to Beijing’s Belt and Road Initiative and might even consider terminating the agreement ahead of schedule.

Trump has consistently threatened to reclaim control of the Panama Canal, pointing to “excessive fees” and worries about China’s increasing influence over the waterway, which was constructed by the US in the early 20th century and transferred to Panama in 1999.

On Sunday, Trump cautioned that “something very powerful is going to happen” if Panama fails to meet US expectations.

“I don’t believe military intervention will be necessary in Panama,” he stated, emphasizing that Panama’s actions have been detrimental to national security in this region.

US officials have previously expressed concerns that China’s involvement in Panama could breach the 1977 Panama Canal Neutrality Treaty, which allows the US to defend the canal if its operations are jeopardized. Some US lawmakers contend that China’s economic activities—such as infrastructure developments and port management—might threaten the canal’s neutrality and endanger its security.

A significant issue is the management of ports at both ends of the canal by CK Hutchison Holdings, a Hong Kong-based firm that US officials believe has ties to the Chinese government. Additionally, the $1.3 billion bridge currently being built by a consortium of China Communications Construction Company and China Harbour Engineering Company is regarded by some as a notable security concern.