Panama President José Raúl Mulino said the months‑long diplomatic crisis with the United States over the Panama Canal is now resolved, marking a turning point after repeated threats from Washington to reassert control over the strategic waterway.
Mulino's comments came in early January as he addressed the state of bilateral relations following a turbulent 2025, when U.S. President Donald Trump claimed the canal was effectively under Chinese control and suggested the United States might "take back" the route.
The accusations centered on Hutchison Ports, a Hong Kong–based company that operates terminals on both ends of the canal under long‑standing concession agreements.
"Panama moved toward a relationship of respect, restored trust, joint work, and friendship," Mulino said, according to various media reports.
The diplomatic rift began after Trump repeatedly alleged that China exerted undue influence over the canal's operations, a claim Panama has consistently rejected. Mulino has emphasized that the canal remains fully under Panamanian control, in accordance with the 1999 handover agreements.
"[The Panama] canal remained Panamanian, as it will indeed continue to be," Mulino told lawmakers in his New Year's address to the National Assembly, calling the dispute "a thing of the past".
The Panamanina president said that "with steady resolve and time" and diplomatic work, the bilateral relationship was repaired and that Panama is now "actively" cooperating with Washington "in the fight against international crime."
The tensions escalated further in 2025 when Panama objected to U.S. statements suggesting American government vessels could transit the canal without paying tolls. Panama insisted that all vessels, including those of the United States, must pay fees under existing treaties.
Despite the friction, both governments have continued security and economic cooperation. Mulino said the renewed stability in relations reflects "trust and friendship" rebuilt after months of public disagreements.
The United States has not issued a formal statement declaring the crisis over, but recent diplomatic exchanges have been notably calmer.
Analysts say the easing of tensions reduces the risk of further confrontation over one of the world's most important trade arteries.
In March 2025, CK Hutchison announced it had reached an agreement in principle to sell control of its global port portfolio to a consortium led by BlackRock and Terminal Investment Limited (TiL), the terminal operator of Mediterranean Shipping Company (MSC). The deal covers 80% of CK Hutchison’s international port assets and includes a 90% stake in Panama Ports Company, which operates the Balboa and Cristóbal terminals in Panama.
TiL, part of MSC Group, represents the terminal arm of the world’s largest container shipping line. Although the agreement was announced in early March, reports indicated that negotiations later stalled amid geopolitical concerns, including objections from Beijing regarding the structure of the consortium.
Separately, the concession held by Hutchison's Panama Ports Company has been challenged in court on constitutional grounds, with a ruling expected from Panama's Supreme Court this month.
The U.S. built and opened the Panama Canal in 1914, but transferred full control to Panama on December 31, 1999, under the Torrijos–Carter Treaties. Under Panama Canal Authority regulations, all vessels, regardless of flag, must pay tolls set according to the ship's size and the type of cargo or capacity units it carries.
