Rubio warns Panama of consequences over canal

US Secretary of State Marco Rubio has threatened action against Panama without immediate changes to reduce Chinese influence on the canal, but the country's leader insisted he was not afraid of a US invasion and offered talks.

Rubio, paying his first visit overseas as the top US diplomat, told Panama on Sunday that President Donald Trump had determined that the country had violated terms of the treaty that handed back the crucial waterway in 1999.

He pointed to the "influence and control" of China over the canal, the vital link between the Atlantic and Pacific oceans through which some 40 percent of US container traffic passes.

Meeting President Jose Raul Mulino, Rubio "made clear that this status quo is unacceptable and that absent immediate changes, it would require the United States to take measures necessary to protect its rights under the treaty," State Department spokesperson Tammy Bruce said.

Mulino painted a less dire portrait of the meeting. He welcomed Rubio at his official residence in the tropical capital's old quarter, with an honour guard outside the whitewashed walls.

"I don't feel that there is any real threat at this time against the treaty, its validity, or much less of the use of military force to seize the canal," Mulino told reporters afterwards, referring to the treaty that handed over the canal at the end of 1999.

"Sovereignty over the canal is not in question," Mulino said.

He proposed technical-level talks with the United States to clear up concerns.

Over the past few years, the area has seen a surge of US-bound migrants.

The Panamanian leader noted that such an expanded deal could potentially allow for the deportation of migrants from Venezuela, Colombia and Ecuador.

'Nothing for Trump here'

Small but intense protests broke out in Panama ahead of Rubio's visit, with police firing tear gas. Protesters burned an effigy of Rubio wearing a red, white and blue suit and held up pictures of him and Trump before a Nazi flag.

"Rubio, get out of Panama!" around 200 demonstrators chanted as the former senator met Mulino. Police prevented the crowd from approaching the Old City.

"To the imperial messenger," union leader Saul Mendez said of Rubio, "we reiterate that there is absolutely nothing here for Trump. Panama is a free and sovereign nation."

Mulino, in response to pressure, ordered an audit of a Hong Kong-based company that controls ports on both sides of the canal.

But speaking to reporters on Friday, Trump said that concession was not enough on the canal and that "it's appropriate that we take it back."

The Panama Canal — which Trump has dubbed a modern "wonder of the world" — was built by the United States at the cost of thousands of lives of labourers, mostly people of African descent from Barbados, Jamaica and elsewhere in the Caribbean.

The United States maintained control of the canal when it opened in 1914 but began to negotiate following deadly riots in 1964 by Panamanians angered over foreign control.

Jimmy Carter sealed the agreement that gave the canal to Panama at the end of 1999, with the late president seeing a moral imperative for the United States to respect a smaller but still sovereign country.