Panama to China: Don’t Let the Door Hit You On the Way Out

If you’ve been following the headlines, you know that big changes are happening in terms of the US Influence in Panama. It’s been a bit of a wild ride trying to keep up with but the long story short is that the Panamanian government has made major moves signaling a definitive shift back toward the U.S. and away from China.

If you’re an investor, a business owner, or just someone who cares about Panama’s future, here’s what we are seeing today.

The U.S. Is Reasserting Itself in Panama

For years, China has had a growing presence in Panama, largely thanks to the Varela administration (2014-2019), which opened the door to major Chinese investment.

That era last week has officially come to an end.

The biggest sign? Panama is actively working to nullify the concessions of Panama Ports Company (PPC), which is majority-owned by Chinese interests. This is a clear play to bring in a new operator—most likely one that’s either American or at least U.S.-friendly. I expect this to happen fairly quickly and may even be a no bid scenario, allowing the new operator to benefit from the millions of dollars of investment made by Hutchison.

Other moves suggest even deeper U.S. involvement:

-U.S. Navy ships are expected to get priority passage through the Panama Canal, possibly free of charge. The revenue loss is small (less than $3M annually), but the message is clear—Panama is prioritizing its relationship with the U.S. military.

There’s also talk of a U.S. military base near the Colombian border in the Darién Jungle. If that happens, it would be the biggest American military footprint in Panama since the bases shut down in 1999.

We also expect Trump to push for U.S. seats on the Panama Canal Authority board. If the U.S. is stepping back in, expect them to want more control.

Politically, this would be a giant win for the new US administration. 

How Are Panamanians Reacting?

Despite the headlines, most Panamanians aren’t upset. If anything, they’re relieved. A lot of the fear-mongering around “the U.S. taking back the Canal” turned out to be just that—fear-mongering. 

Instead, what’s happening now is a rebalancing of alliances, and most people are okay with a much stronger US Influence in Panama.

That said, not everyone is happy.

There are political factions in Panama like Suntracks that don’t like the idea of giving the U.S. too much influence. To date, they’ve never had the numbers or the leverage to change the course of what’s happening.

Historically, the US has always been a very important and respected ally of Panama so it’s something that multiple generations of Panamanians are used to and were quite frankly probably expecting. 

What Does This Mean for Investors & the Real Estate Market?

Short-term, this uncertainty is making some buyers hesitate. People don’t like instability, and any time there’s a shift this big, some investors will pause to see how things shake out. I’ve already noticed a slowdown in people coming to Panama to look at real estate.

Long-term, I think that a stronger US Influence in Panama is going to be a good thing. A stronger U.S.-Panama relationship means more stability and predictability, which is what investors ultimately want. The biggest wildcard right now is what happens with Chinese-backed projects. If Panama starts pulling the plug on them, it could create new investment opportunities for those willing to step in but also cause some delays to major infrastructure projects like the 4th bridge over the Canal to be delayed even more. which would be bad news for everyone except the new company coming in and a few choice politicians covering a commission. 

Long Term Effects on US Influence in Panama

For better or worse, this makes it crystal clear where Panama’s allegiance lies. The country has always been a U.S. ally, but after years of hedging between China and the U.S., the government is now picking a side—and it’s Washington.

For some, this is reassuring. It signals consistency, makes U.S. investors more comfortable, and could lead to better diplomatic and economic cooperation. For others, it’s a concern, especially when it comes to the unpredictability of U.S. politics.

Final Thoughts

Panama is at a crossroads. The government is making big, decisive moves that will shape the country’s future for years to come. If you’re investing here, now is the time to pay attention, track policy changes, and look for opportunities in the transition.

Short-term, expect some hesitation in the market. Long-term, I see a stronger, more U.S.-aligned Panama creating a more stable investment climate. The next 6–12 months will be key in determining how this plays out, but one thing is clear: the status quo is over.