Panama's President José Raúl Mulino didn't hold back during his weekly press briefing last October. He dropped a bombshell that sent shockwaves through the diplomatic corridors of both Panama City and Washington. Essentially, he claimed that a "female embassy official" from the U.S. was essentially door-knocking, telling Panamanian officials that their precious U.S. visas were on the line if they didn't distance themselves from Chinese business interests.
It sounds like a plot from a political thriller. But for Mulino, it was a very real breach of diplomatic etiquette.
Why Panama’s President Said a U.S. Embassy Official Threatened Visas
The friction didn't just appear out of thin air. It’s been building since Mulino took office in early 2025, right as the Trump administration returned to the White House with a renewed, aggressive focus on "taking back" the Panama Canal from perceived Chinese influence.
Mulino’s specific accusation was pointed. He mentioned he had information from multiple sources about this specific official using visa revocations as a "stick" to coerce ministers and lawmakers. Honestly, the timing was incredibly sensitive. The U.S. has been openly nervous about Chinese firms winning contracts for infrastructure like port expansions and a new bridge over the canal.
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Washington sees these as "dual-use" risks. Panama, on the other hand, sees them as necessary investments for a growing economy.
The U.S. Response: Privilege vs. Rights
The U.S. Embassy didn't exactly deny that visas were being looked at. Ambassador Kevin Marino Cabrera was quick to release a statement that was basically a masterclass in diplomatic deflection. He didn't confirm the "threats," but he pointedly reminded everyone that a U.S. visa is a "privilege, not a right."
By September 2025, the State Department had already rolled out a new policy. It specifically targets Central American citizens who "intentionally act on behalf of the Chinese Communist Party" to undermine regional rule of law. So, while the U.S. denies the tactic of threatening individuals, they are very public about the policy of revoking visas for those cozying up to Beijing.
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The Geopolitical Tug-of-War
Panama is caught in a massive squeeze play. On one side, you have the United States, which has historically viewed the canal as its own backyard. On the other, China has been Panama’s second-largest canal user and a massive source of infrastructure funding since 2017.
Mulino’s stance is one of "neutrality." He’s tried to tell both sides that Panama isn't a pawn. He famously said, "They’re free to give and take a visa to anyone they want, but not by threatening." It’s a bold move for a leader whose country relies so heavily on U.S. security cooperation and trade.
- The Canal Factor: Trump’s rhetoric about the canal being "under Chinese control" has been a major sticking point.
- Infrastructure: Projects like the Fourth Bridge over the Canal and the Cruise Terminal are frequently cited by the U.S. as points of concern.
- Regional Precedent: Panama isn't alone. Former Costa Rican President Oscar Arias and Mexican officials have also seen their visas yanked recently under similar "national security" justifications.
Is the Crisis Finally Over?
Fast forward to January 2026, and the tone seems to have shifted—at least on the surface. In his New Year’s address, Mulino declared that the "crisis with the United States is over." He claimed the relationship has been restored through "steady resolve" and mutual respect.
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This "thaw" followed some major concessions. Panama reportedly moved toward excluding certain Chinese firms from sensitive canal-side operations and has ramped up cooperation on migration in the Darien Gap. It seems the "visa threats" might have been the high-water mark of a very tense period of coercive diplomacy.
What This Means for You
If you’re a business owner or a traveler in the region, this diplomatic spat matters because it sets the tone for how the U.S. uses its border as a tool of foreign policy. The "weaponization of visas" isn't just about high-level politicians; it reflects a broader strategy where anyone deemed to be working against U.S. interests—even through legitimate business with China—could find themselves on a blacklist.
Next Steps to Monitor:
- Watch the Courtroom: The Panamanian Supreme Court is currently reviewing the constitutionality of major port concessions. If they rule against Chinese-linked firms, it’s a sign that U.S. pressure worked.
- Track the "First Out" Movement: Keep an eye on Mulino's promise to make Panama the first country in the hemisphere to officially exit China’s "Belt and Road Initiative." This would be a massive win for Washington.
- Stay Informed on Visa Policies: For anyone doing business in Central America, the September 2025 State Department guidelines remain the gold standard for what not to do if you want to keep your U.S. entry privileges.
Ultimately, Panama is trying to play both sides of the board. They need U.S. security and Chinese cash. While the immediate "visa threat" drama may have cooled, the underlying tension over who really controls the world’s most famous shortcut isn't going anywhere.