US had made inroads against Chinese influence in Panama, but Trump’s demands could help Beijing expand its regional power

When Panama’s then president Juan Carlos Varela was invited to the White House in June 2017, Donald Trump said the Panama canal was doing “pretty well” and described the bilateral relationship as “very strong”.

Just days earlier, Varela had broken ties with Taiwan to establish diplomatic relations with China, but there was no indication that this snub to a key US ally had clouded the meeting.