Description: The Panamanian President Jose Raul Mulino has debunked statements from the US State Department which aired on Friday that Panama and the US have reached an agreement for free transition of US warships in the canal. The information came as the US and Panama are disputing the usage of the canal since President Donald Trump took office and threatened to reclaim it from Panamanian authorities. The US also disputed the Chinese influence over the canal in the form of receiving favorable transit fees over US flagged ships.
Impact: The US and Panama have entered unchartered waters at this point as the Trump administration looked to reestablish regional dominance in Central America. The dispute over the Panama canal is further used in the trade cold war between China and the US while putting Panama in a precarious state of affairs. The vital transit point is part of Trump’s plan to enlarge US economy dominance as he also conditions Panama for favorable transit fees. Marco Rubio’s visit last week has prompted serious concerns over the US stance on the situation with the canal. Panama couldn’t unilaterally decrease the transit fees as there are preconditions that determined that, while China and the US would keep pressure on Panama over economic and geopolitical dominance in the maritime trade and transport industry.