Ambrose Evans-Pritchard writes:

The president of Panama is a brave man. José Raúl Mulino has continued to defy the White House with open contempt even after watching the punishment beating of Ukraine.

“Donald Trump is lying again. In the name of Panama and all its people I reject this fresh assault on the truth and the dignity of our nation,” he said, in response to Trump’s latest outrage, a fresh set of fabrications and threats to retake the Panama Canal.

What can this defenceless little country of 4.5m possibly do at this juncture to head off the escalating and impossible demands coming from Washington? China’s presence in the canal zone has already been reduced to almost zero.

The US investment fund BlackRock is taking over the two “Chinese” ports – one at each end of the narrow Isthmus – owned and run by Hong Kong’s CK Hutchison.

It is part of a jumbo $23bn (£18bn) deal involving facilities around the world as Hutchison’s Li Ka-Shing retreats from his global empire, bowing to US pressure while he can still do so for a profit. Yet Trump persists.

“My administration will be reclaiming the Panama Canal. We didn’t give it to China. We gave it to Panama and we’re taking it back,” he said to rapturous applause from his Maga tribe in Congress.

Those familiar with the long rhythms of Latin American history can only watch this spectacle of humiliation with foreboding. Trump is playing straight into the hands of the Chinese. The more he plays the Ugly American, the easier Beijing can exploit the Latin backlash.

The final handover of the canal in 1999, under the Torrijos-Carter Treaties, has until now been a triumph of far-sighted US diplomacy, converting Panama over time from a smouldering hot spot of anti-Gringo grievance into the most pro-American society of the Western hemisphere.

Its middle classes are educated in the US. It is designated “free” in the Freedom House rankings with a score of 83, almost the same as the US itself. President Mulino is a tough, law-and-order, capitalist conservative.

“Picking a fight with Panama is really weird,” said Cristina Ramirez, a Panamanian political scientist at King’s College London.

“The country is ideologically aligned with the US. We don’t export migrants and we’re already trying to counter Chinese influence. But no leader can hand over the canal because it is written into our constitution, and he wouldn’t last two hours if he tried,” she said. [Continue reading…]