US has several strategies to counter Chinese influence in Panama, according to a US official

The chair of the Federal Maritime Commission is set to inform a U.S. Senate committee that the United States possesses various strategies to counter the increasing influence of China and its enterprises in Panama. President Donald Trump has expressed intentions to reclaim the Panama Canal, yet he has not provided specific details regarding the timeline or methods for this endeavor, which involves the sovereign territory of an ally.

“We must enhance support for American businesses aiming to operate in Panama and across the Americas. It is essential that Chinese firms do not monopolize contract bidding,” stated Federal Maritime Commission Chair Louis E. Sola in written remarks prepared for the Senate Commerce Committee hearing on the Panama Canal.

Sola further noted that “Chinese firms have secured billions in development contracts in Panama, many of which pertain to infrastructure projects located near or on the Panama Canal.” Senate Commerce Committee Chair Ted Cruz remarked prior to the hearing: “The United States financed and constructed the Panama Canal, yet Panama is treating us unjustly by relinquishing control of critical infrastructure to China.”

Trump has previously indicated that he would not dismiss the potential use of military force, a stance that has drawn criticism from both allies and adversaries in Latin America. In his testimony, Sola emphasized, “The United States has viable options to address the expanding presence of China and its companies in Panama and throughout the Americas, as well as to ensure the ongoing relevance of the Canal.”

It was emphasized that safeguarding the autonomy of the Panama Canal Authority is of utmost importance. Last week, Panama’s president, Jose Raul Mulino, asserted that the country has managed the canal in a manner that supports global trade, particularly for the United States, affirming that it “is and will continue to be Panamanian.” The Panama Canal facilitates over 40% of U.S. container traffic, which is estimated to be worth around $270 billion each year.

In August of the previous year, Sola and the then-chair of the FMC, Dan Maffei, traveled to Panama to meet with Mulino following significant drought conditions that adversely affected canal operations. Maffei stated in written testimony prepared for the Senate committee on Tuesday that the rainy season in Panama last year has fortunately mitigated severe water supply challenges “for the time being and restored normal transit volumes.”