By Eric Martin | Bloomberg News

Secretary of State Marco Rubio told Panamanian leaders that the U.S. would protect its rights under the Panama Canal Treaty if the Central American nation didn’t move to oust Chinese-connected companies near the critical waterway.

“The current position of influence and control of the Chinese Communist Party over the Panama Canal area is a threat to the canal and represents a violation of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal,” according to a State Department readout of Rubio’s meeting with Panamanian President Jose Raul Mulino and Foreign Minister Javier Martinez-Acha.

Rubio, echoing complaints President Donald Trump has made since December, “made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the Treaty,” the statement said.

Mulino, speaking to reporters after the meeting, appeared unfazed.

“I don’t sense any real threat against the treaty or its validity, and much less of the use of military force to take over the canal,” he said in Spanish. “I don’t sense that.”

China’s influence has been growing in the region. In 2017, a previous Panamanian government severed diplomatic ties with Taiwan and declared that there was “only one China” — a move that has occurred in several Latin American nations in recent years.

China’s foreign ministry has said that it will always respect Panama’s sovereignty over the canal, and recognizes it as a permanently neutral international waterway.

A Chinese company — a subsidiary of Hong Kong-based CK Hutchison Holdings Ltd. — has two of the five ports adjacent to it, one on each side. Under Panama’s constitution, the canal is managed by the Panama Canal Authority, with some of the tolls going into the national treasury.

The Panama Canal has come under heightened scrutiny since December, when Trump complained that it’s charging exorbitant rates to U.S. ships. He demanded that fees either be lowered, or that Panama return the canal to the U.S.

Mulino has previously said his country would not give up control of the canal.

In a Truth Social post, Trump called the fees “ridiculous” and the current situation a “complete ‘rip-off.’” In his inaugural address last month, Trump reiterated his claim that China is operating the Panama Canal and said his administration would take it back.

The U.S. built the canal at the start of the 20th century and ceded it back to Panama in 1999 under a treaty signed by President Jimmy Carter in 1977 — a move that Trump called foolish.

The 51-mile canal connecting the Atlantic and Pacific oceans is a major strategic asset, and has been a choke point for global trade as Panama has suffered a prolonged drought that has impeded crossings.

Rubio, the son of Cuban immigrants, arrived in Panama on Saturday for the start of a six-day trip that will also take him to El Salvador, Costa Rica, Guatemala and the Dominican Republic.

Rubio’s visit to the canal — his first foreign trip as the top U.S. diplomat — came a day after Trump announced 25% tariffs for Mexico and Canada that will take effect on Tuesday, as well as 10% tariff on China.

It also comes amid a push by Trump to muscle Latin American countries to receive deportees from the U.S., many from Central America. A dispute with Colombian President Gustavo Petro last week resulted in the threat of tariffs on one of the U.S.’s strongest regional allies.

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The trip is designed to build partnerships with countries in the region to curb mass migration, lay the ground for deportations, and stop drug trafficking, Rubio said in an op-ed in the Wall Street Journal last week. He placed the trip, and greater attention to nations located geographically closer to the U.S., within Trump’s promise to “put America first.”

It’s the first time the region has been chosen for a top U.S. diplomatic envoy’s maiden trip in more than a century. Secretaries typically visit allies like Japan or Germany, while Rubio’s predecessor, Antony Blinken, spent several trips over the past year focused on the wars in Europe and the Middle East.

(With assistance from Michael McDonald and Nicolle Yapur.)

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