Retaking the Isthmus
Panama bulletin
Last week’s bulletin covered tariffs that the Trump Administration imposed on Canada, Mexico, and China, and proposed that such could inadvertently act as a catalyst for establishing the North American Union between the U.S., Canada, and Mexico, even as it seems to push countries further apart initially. Of course, just a day later, President Trump delayed his 25% tariff on imports from Canada and Mexico for 30 days after both nations agreed to fortify their borders with additional troops, though a 10% tariff on Chinese imports still took effect.
Meanwhile, Chinese countermeasures became clearer after the country imposed its own 15% tariff on certain types of coal and liquefied natural gas, as well as a 10% tariff on crude oil, agricultural machinery, and large vehicles. Additionally, China imposed export controls on over two dozen metal products, including tungsten and tellurium, which are crucial for industrial and defense applications. The Chinese government also added U.S. companies Illumina and PVH Group to its “unreliable entities” list, accusing them of violating market principles, and launched an anti-monopoly investigation into Google.
But that wasn’t the only example either of escalating tensions between the two superpowers, or the only one of U.S. aggressions in Latin America: at the start of this month, U.S. Secretary of State Marco Rubio arrived in Panama—which devotees will know took center stage in one of our first year’s dispatches—to begin his tour of five Central American and Caribbean nations (Panama, El Salvador, Guatemala, Costa Rica, and the Dominican Republic) focusing on immigration, drug trafficking, and countering Chinese influence. That tour started hot on the heels not just of President Trump’s opening salvo in a trade war, but of his false claims during his inaugural address that China controls the Panama Canal, and his vows to take it back. This follows his earlier accusations that Chinese soldiers operate the canal, a claim which both Panama and China have strongly denied. Panamanian President José Raúl Mulino reiterated that no foreign nation interferes with the canal, which has been fully controlled by the Panama Canal Authority since 1999.
U.S. concerns naturally stem from China’s growing economic presence in Panama and influence in Latin America, especially after Panama cut diplomatic ties with Taiwan in 2017 and joined China’s Belt and Road Initiative (BRI). While China does not own or operate the canal, Chinese companies, including Hong Kong-based Hutchison Port Holdings, manage two major ports near the waterway. China is also the canal’s second-largest user and has invested heavily in Panama’s infrastructure.
Though President Mulino rejected Secretary Rubio’s push for the return of the Panama Canal to U.S. control, the latter’s warning of potential retaliation if Chinese control over the canal area was not reduced compelled Panama to announce its withdraws from China’s BRI two days after Rubio’s arrival and to terminate a key development deal with Beijing and to begin an audit of Hutchison Port Holding’s canal operations that could lead to a rebidding process.
Later that week, the U.S. State Department claimed that Panama had agreed to no longer charge transit fees for U.S. government vessels passing through the canal, but Secretary Rubio soon walked that claim back after President Mulino strongly denied it. The Panama Canal Authority (ACP) confirmed no fee changes had been made but expressed willingness to discuss the matter with U.S. officials.
In response to Panama’s withdrawal from the BRI, China criticized the U.S. for “coercion” and accused Washington of undermining its infrastructure program, which has faced concerns over debt and environmental impact.
But few if any countries in the Western Hemisphere have the capacity to resist U.S. influence. As the sole superpower in the Americas, last century’s premiere empire needs now to adapt to a multipolar world, as ZeroHedge argued last week. In their view, President Trump’s tariffs on Mexico, Canada, China, and possibly the EU, along with his deportation policies, attempts to reclaim the Panama Canal, and interest in purchasing Greenland, all reflect a shift in U.S. strategy to adapt to a multipolar world. This marks a departure from the post-World War II globalist approach, aligning domestic economic policies with geopolitical interests.
Secretary Rubio himself acknowledged this shift, stating that the U.S. must now prioritize its own interests rather than maintaining a unipolar global order. Historically, the U.S. followed protectionist trade policies until the Cold War, when it embraced free trade to strengthen its capitalist allies. The Trump administration is reversing this, using tariffs to reinforce U.S. influence over Mexico and Canada, curb China’s economic power, and protect domestic industries. Deportations are framed as an economic and geopolitical necessity, while reclaiming the Panama Canal and acquiring Greenland align with the Monroe Doctrine, signaling a retreat from globalist policies. The closure of USAID further reflects this shift, as the U.S. moves away from funding foreign interventions and political movements.
But naturally, these policy changes also have financial implications, particularly for cryptocurrency markets, with some arguing that Trump’s tariffs could drive Bitcoin prices higher. (We here at Radio Free Pizza seem to have been thinking along the same lines, with our last bulletin having explored how the cryptocurrency sector reacted to these changes, especially with Trump’s recent executive order on digital assets—doubtless a push toward the cashless society discussed in our subsequent spectacle.) Investors are monitoring how these geopolitical moves impact market trends and potential buying opportunities.
Of course, some disagree: as retired Colonel Douglas Macgregor explained (at ~31:07) last week in an interview with Edmund DeMarche of The Trends Journal, the U.S. has “no reason to go into Panama. The Chinese are either end of the canal conducting repairs and harbor improvements […] The reason the Panamanian government hired them is because our firms in the United States declined to do the work. So if you really don’t want the Chinese down there on that canal in any shape or form, pick up the phone, call Beijing and say, ‘We’ll buy out your contracts.’ And then we’ll send our contractors down there. We've got to get out of this business of assuming, ‘Oh there’s a danger there to us,’ and so forth. It’s nonsense.”
Still, we must disagree here with Macgregor, or rather, add a caveat: the U.S. has no reason to go to Panama and assume control of the canal unless the country has decided to surrender international hegemony in favor of becoming one of the world’s “ten kingdoms” as the center of a regional bloc.
But others see less rhyme or reason: while investors might look for buying opportunities, the uncertainty surrounding these tariffs is already impacting the U.S. economy, leading businesses to pause hiring and investment. Many business owners, including those in retail and manufacturing, fear higher costs and declining profits. Overall, the tariff uncertainty is hurting business confidence, slowing hiring, and threatening economic growth. Many executives feel more stressed, and 47% cite economic uncertainty as their biggest concern heading into 2025.
Meanwhile, other economic indicators suggest headwinds, with canal traffic now below pre-2023 drought levels—except for container ships, which continue to operate efficiently due to priority scheduling—though Trump has linked delays to China without evidence. China of course urged Panama to resist U.S. interference and prioritize long-term bilateral relations, but given the apparent shift in U.S. geopolitical doctrines—and the physical proximity from which it can exercise force to achieve its aims—few seem to expect Panama to follow that advice.
As U.S. expansionist policies in Latin America continue to unfold, Panama’s response to American pressure serves as a clear example of the shifting geopolitical landscape. While the Trump Administration’s moves—tariffs, deportations, and efforts to reassert control over strategic assets—reflect a broader strategy of adapting to a multipolar world (one in which the U.S. seems to regard China as chief among rivals), the economic and political consequences remain uncertain. Investors are weighing opportunities, businesses are grappling with instability, and the future of U.S.-China relations in the region remains highly contested. Whether Panama and other Latin American nations can resist U.S. influence or will ultimately realign with Washington’s vision remains an open question—one we will continue to track closely.