U.S. Secretary of State Marco Rubio warned Panama on Sunday that it must immediately reduce Chinese influence over the Panama Canal or face potential action from the United States. Rubio, speaking on behalf of President Donald Trump, raised concerns that China's involvement in the canal may violate the 1977 treaty ensuring its neutrality and open access to global trade.

"Secretary 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," the State Department said in a statement.

Rubio met with Panamanian President José Raúl Mulino in Panama City on Sunday, marking his first overseas trip as the nation's top diplomat. Mulino, who has resisted pressure from the U.S. on the canal issue, said the discussions were "respectful" and "positive" and insisted that there was no "real threat against the treaty and its validity."

Mulino did, however, confirm that Panama would not renew its agreement with China's Belt and Road Initiative when it expires. Panama originally joined the initiative after dropping diplomatic recognition of Taiwan in favor of Beijing.

Concerns over China's role in Panama have grown in recent years, particularly due to the Hong Kong-based company Hutchison Ports, which operates port facilities on both ends of the canal under a 25-year, no-bid extension. Some officials in Washington and Panama worry that Chinese firms could turn the canal into a strategic choke point in the event of a conflict.

Trump has repeatedly claimed that Panama has ceded control of the canal to China and suggested during his inauguration speech that the U.S. would take it back. "We didn't give it to China. We gave it to Panama, and we're taking it back," Trump said.

Despite U.S. warnings, Mulino has ruled out any discussions about ceding control of the canal. "Obviously, the Panamanians are not big fans of that idea," Rubio acknowledged on Thursday.

Meanwhile, about 200 demonstrators gathered in Panama City, waving flags and chanting "Marco Rubio out of Panama" and "One territory, one flag." Riot police blocked them from reaching the presidential palace, and some burned a banner featuring Trump and Rubio's images.

The State Department has not detailed what specific actions the U.S. might take if Panama does not comply with its demands. However, speculation includes potential economic measures, trade restrictions, or sanctions.

Leland Lazarus, a researcher on China's role in Latin America at Florida International University, told NPR that Rubio will face challenges convincing Panama to scale back ties with China, given Beijing's significant trade and investment presence across Latin America.

Rubio's Latin American tour will also include visits to El Salvador, Costa Rica, Guatemala, and the Dominican Republic. His trip comes as U.S. foreign aid programs in Central America have been halted due to funding freezes.

Despite the freeze, the State Department announced that Rubio had approved waivers for certain critical programs, though details have not been disclosed.