China Throws Its Weight Around In America’s Backyard Over Taiwan

China reportedly threatened Panama with “serious consequences” after a majority of the country’s lawmakers backed the creation of a parliamentary exchange group with Taiwan.

The newly-created Panamanian parliamentary exchange group with Taiwan has opened a diplomatic rift between Beijing and Panamanian lawmakers less than a decade after Panama abandoned diplomatic relations with Taiwan in favor of China, the South China Morning Post (SCMP) reported Monday, citing Chinese Foreign Ministry spokesman Guo Jiakun. Panamanian President José Raúl Mulino has publicly distanced his government from the lawmakers’ initiative as Beijing pressures the country to reaffirm its commitment to the one-China principle, the outlet reported.

“We congratulate Panama for taking steps to assert its sovereignty and align with President Trump’s vision for the Panama Canal,” a senior U.S. official told the Daily Caller News Foundation. “The President has made clear that Chinese control of the Panama Canal is unacceptable, violates the U.S.-Panama Treaty, and jeopardizes our national and economic security.”

In the event of global war, such as World War III, the Panama Canal would be an irreplaceable asset for the U.S. Navy if it needed to rapidly deploy surface vessels for combat in the Pacific Ocean.

The dispute puts Beijing’s pressure campaign squarely in a region Washington considers strategically vital. The Trump administration’s 2026 defense strategy specifically warned that growing adversary influence around the Panama Canal could threaten U.S. access to key terrain in the Western Hemisphere and undermine American security interests, according to the Department of War.

China has spent years expanding its economic and infrastructure footprint in Panama, including investments involving ports, telecommunications and transportation projects around the canal, according to the Center for Strategic and International Studies. Beijing’s warning over the Taiwan group represents another front in the broader competition between China and the U.S. for influence in a country controlling one of the Western Hemisphere’s most strategically important waterways.

“The United States must be preeminent in the Western Hemisphere as a condition of our security and prosperity—a condition that allows us to assert ourselves confidently where and when we need to in the region,” a senior U.S. official told the DCNF. “The terms of our alliances, and the terms upon which we provide any kind of aid, must be contingent on winding down adversarial outside influence—from control of military installations, ports, and key infrastructure to the purchase of strategic assets broadly defined.”

“There is but one China in the world and Taiwan is an inalienable part of China’s territory,” Guo said during a Monday press briefing, according to the Chinese Ministry of Foreign Affairs. “To cross the line on the Taiwan question will lead to serious consequences.”

The Panamanian embassy in Washington did not respond to a request for comment.

“The Foreign Ministry has already made China’s position clear. There is but one China in the world, and Taiwan is an inalienable part of China’s territory,” a Chinese embassy spokesperson told the DCNF. “China firmly opposes any form of official interaction or contact between countries having diplomatic relations with China and the Taiwan authorities. The establishment of the so-called ‘Panama-Taiwan Inter-Parliamentary Exchange Group’ seriously violates Panama’s longstanding commitment to the one-China principle. Those who cross the line on the Taiwan question will face serious consequences. I have no further information to provide on the specifics.”

Panama is not just another diplomatic battleground for Washington. The Panama Canal is a major commercial and military artery for the U.S., with roughly 70% of vessels transiting the waterway traveling to or from American ports and nearly 100 U.S. military vessels using it each year, Defense Secretary Pete Hegseth said during an April visit to Panama, according to the Department of War.

The canal carries more than $250 billion in goods annually and cuts nearly 8,000 miles from voyages between America’s Atlantic and Pacific coasts, Hegseth said.

The Trump administration has consequently made keeping Beijing away from the canal an explicit national security priority, with the 2026 National Defense Strategy pledging to guarantee American military and commercial access to the waterway, according to the Department of War

Beijing also targeted Washington in its response, accusing the U.S. of interfering in China-Panama relations after American lawmakers participated in the group’s launch by video, according to the Chinese Ministry of Foreign Affairs. China urged the U.S. to stop “disrupting and sabotaging China-Panama relations” and accused Washington of sending the wrong message to supporters of Taiwanese independence.

Guo accused the parliamentary group of “seriously” violating the one-China principle that Panama has recognized since establishing diplomatic relations with Beijing, according to the Chinese Ministry of Foreign Affairs. Beijing said it expects Panama to demonstrate its commitment through “real actions” and protect what China described as the political foundation of bilateral relations.

The group was formally established Sept. 8 inside Panama’s National Assembly and drew signatures from 45 of the chamber’s 71 lawmakers, the SCMP reported, citing group leader Medin Jimenez. Other lawmakers supported the initiative but did not sign the document before it finished circulating through the legislature, Jimenez told the outlet.

Taiwan’s government separately said the 45 members represent more than 60% of Panama’s legislature and include National Assembly President Shirley Castañedas and other senior lawmakers, according to Taiwan’s Ministry of Foreign Affairs.

Mulino has sought to draw a line between the lawmakers and his administration, saying Panama’s foreign relations are controlled by the executive branch and that the lawmakers’ dealings with Taiwan do not represent an endorsement from his government, according to the Chinese Ministry of Foreign Affairs.

Panama formally severed diplomatic ties with Taiwan and established relations with the People’s Republic of China in June 2017, according to China’s Ministry of Foreign Affairs. Panama agreed at the time to recognize Beijing as the sole legal government of China and pledged not to maintain official relations or exchanges with Taiwan.

Panamanian lawmakers behind the new group maintain that it does not violate those commitments because the initiative is centered on commercial and unofficial exchanges, the South China Morning Post reported, citing Jimenez.

Panama and Taiwan have also maintained economic links despite the diplomatic rupture, including a free-trade agreement that has remained in force since January 2004, according to the SCMP. Panama exported more than $158 million in seafood and other products to Taiwan during the last financial year, the outlet reported, citing Jimenez.