'Intolerable' US claim sparks new row over Panama Canal

US government vessels — primarily from the navy — make up a small portion of the ships that pass through the canal.

Trump has loudly complained that US vessels are being overcharged to use the shipping route.

Mulino said that US government vessels, including navy vessels, paid “$6-7 million a year” for the right of passage.

“It’s not as if the canal toll is breaking the economy of the United States,” he remarked.

Beyond the tolls, Washington has appeared chiefly concerned about Chinese investment in the 50-mile (80-kilometer) long canal, which handles five percent of global maritime trade.

CK Hutchison Holdings — owned by Hong Kong billionaire Li Ka-shing — has a concession to manage two of the canal’s five ports.

Trump, who is scheduled to hold telephone talks on Friday with Mulino, has claimed that Beijing could close the canal to the United States in a crisis — a claim Panama strenuously denies.

But in a key concession to Washington, Mulino on Thursday confirmed that Panama had pulled out of China’s massive Belt and Road Initiative (BRI) infrastructure program.

Chinese project torpedoed

Mulino said that the Panamanian Embassy in Beijing had given China the required 90-day notice of its decision not to renew its involvement in the program, which it joined in 2017.

Panama is the first Latin American country to announce its withdrawal from President Xi Jinping’s signature, trillion-dollar program, which operates in over 100 countries.

On Wednesday, China’s Foreign Affairs spokesman, Lin Jian, had argued that the partnership was yielding “fruitful results” and urged Panama to “resist external interferences.”

The latest controversy over the Panama Canal comes at the end of Rubio’s week-long visit to Central America, his first as the US top diplomat.

He had threatened action against Panama unless it made immediate changes to reduce Chinese influence on the canal but later appeared more conciliatory, hailing Mulino’s pledge to quit China’s infrastructure program as a “great step forward” for bilateral relations.

Following Trump’s canal takeover threat, Mulino last month ordered an audit of Hutchison Holdings.

“If they violate the terms of the concession or cause imminent economic harm to the country, we will act accordingly, but for now the audit is ongoing,” he said Thursday.