Red lines in the Caribbean: How Washington is sending signals to Beijing through Venezuela and Panama

CDR José Adán Gutiérrez, USN (Ret.), Senior Member, MSI² - Dr. Rafael Marrero, Founder and Executive Director, MSI²

Summary

The recent naval attack by the United States on a Venezuelan ship and the subsequent escalation of military deployments in the Caribbean are not isolated tactical moves aimed solely at the Nicolás Maduro regime. Rather, they represent a broader demonstration of U.S. determination in the face of China's growing economic, technological, and geopolitical presence in the Western Hemisphere. While overthrowing Maduro remains a short-term operational objective, the deeper strategic purpose of Washington's actions lies in signaling to Beijing that the United States is prepared to deploy its hard power to defend its supremacy in the region.

This document positions U.S. actions at three concentric levels: Venezuela as the trigger, Panama as the pivot, and China as the target. The attack in the Caribbean should be interpreted as a reverberation of Washington's previous stance on Panama: a hemispheric echo designed to redefine the strategic red lines for Beijing. By integrating historical precedents, trade and Canal data, regional political dynamics, and risk assessments, this analysis demonstrates how U.S. credibility depends on both military presence and sustained economic, digital, and institutional commitment.

Executive Summary

The U.S. attack on a Venezuelan ship and the reinforcement of naval presence in the Caribbean reflect a message with three layers:

1. Immediate Level — Venezuela: Maduro is identified as the leader of a narcostate and a representative of extra-hemispheric actors. But Venezuela is the stage, not the performance.

2. Intermediate Level — Panama: The Canal remains the crucial artery of hemispheric trade. The growing presence of China in Panama—from ports to telecommunications—challenges U.S. dominance. Washington’s naval posture and renewed cooperation with Panama signal a red line: the Canal will not be relinquished.

3. Strategic Level — China: Beijing is the true audience. The United States is demonstrating that it will not cede its hemisphere, even at the risk of confrontation.

Key Findings:

• China has solidified its presence in Panama, Argentina, Chile, Brazil, and Honduras through infrastructure, energy, and debt diplomacy (Ellis, 2023; Gutiérrez, 2025a, 2025b, 2025d).

• The Canal handles about 6% of global trade; U.S. credibility depends on keeping it free from Chinese control. Recent drought-related restrictions further highlight its fragility (Panama Canal Authority, 2024; Reuters, 2024; Gutiérrez, 2025c).

• Latin America is divided: elites often lean toward Chinese financing, but public opinion is wary of authoritarian influence (Pew Research, 2024).

• U.S. power projection reassures its allies, but carries risks of escalation, overreach, and intensification of the People's Republic of China's information war (Marrero, 2025).

Policy Recommendations:

• Continue institutionalizing security cooperation between the U.S. and Panama to safeguard the Canal.

• Increase funding from the Development Finance Corporation (DFC) and the Inter-American Development Bank (IDB) to offer alternatives to Chinese loans.

• Launch a digital sovereignty initiative to counter Huawei's dominance.

• Expand U.S. public diplomacy, media, and anti-disinformation programs to challenge Chinese narratives.

• Deepen coalition building with Colombia, Brazil, Argentina, and Panama for coordinated hemispheric defense.

Introduction

The crisis in Venezuela has become an indirect stage for broader geopolitical competition. In August 2025, the Trump administration increased the reward for Nicolás Maduro to $50 million and authorized naval actions against Venezuelan ships accused of drug trafficking. While it was presented as an offensive against a rogue regime, the attack had repercussions far beyond Caracas.

The broader logic lies in the changing balance of power in the Western Hemisphere. China has integrated into Panama's ports and digital infrastructure, Argentina's space facilities, Chile's lithium mines, Brazil's agroindustry, and, more recently, Honduras's diplomatic and economic realignment (Ellis, 2021; Gutiérrez, 2025a, 2025b, 2025d). The Western Hemisphere, once a disputed strategic space for the United States, is now contested territory.

Therefore, the naval attack is not limited to Venezuela. It is the Caribbean echo of a blow to Panama: a hemispheric message to Beijing that Washington will reaffirm its primacy through hard power if necessary (Gutiérrez, 2025c). This evokes a lineage of U.S. hemispheric doctrines—from the Monroe Doctrine to Roosevelt's corollary—updated for the 21st-century contest with China.

Section I: The Immediate Trigger — Venezuela

Washington has long portrayed Maduro as an illegitimate authoritarian and a drug cartel kingpin. The $50 million reward, the highest ever offered by the United States for a sitting head of state, reflects that image (U.S. State Department, 2025). The attack on a Venezuelan ship fits the narrative: Maduro's regime is not sovereign, but criminal.

However, Maduro is an indirect variable. He serves Beijing's purposes as a supplier of crude oil and a diplomatic irritant for Washington, but China will not invest capital to save him (Cacciati, 2025). Venezuela is the trigger, not the target.

At the same time, Washington's calibrated approach is evident: U.S. sanctions remain in effect, but Chevron retains limited licenses to operate in Venezuela. This dual approach underscores that Venezuela is treated as a managed problem: a stage for signaling, not the focal point of U.S. regional policy.

Section II: The Growing Presence of China in Latin America

China's strategy is patient, diversified, and cumulative:

• Panama: After recognizing Beijing in 2017, Panama opened its doors to Chinese companies. COSCO Shipping obtained port concessions near Colón, and Huawei built much of the telecommunications infrastructure (Ellis, 2023; Gutiérrez, 2025c). Chinese bids for logistics parks adjacent to the Canal alarmed Washington.

• Argentina: The Neuquén space station, nominally civilian, operates under opaque terms and is widely suspected of having dual-use military functions (Ríos, 2024; Gutiérrez, 2025b).

• Chile: China dominates lithium processing, holding stakes in SQM and Tianqi Lithium. By 2024, over 60% of Chile's lithium exports were headed to China (IEA, 2024; Gutiérrez, 2025a).

• Brazil: Beijing has become Brazil's main trading partner, acquiring soy, oil, and minerals. Brazil's membership in BRICS and its acceptance of Chinese financing expand Beijing's hemispheric influence (Ellis, 2022).

• Cuba: China has invested in signals intelligence infrastructure and digital projects, raising suspicion of surveillance cooperation (Ellis, 2021).

• Honduras: After transferring recognition from Taiwan to Beijing in 2023, Honduras welcomed projects from the People's Republic of China in energy and telecommunications, indicating that Chinese influence now sits directly in Central America (Gutiérrez, 2025d).

• Debt Diplomacy: Ecuador and Venezuela illustrate how Chinese loans trap governments in long-term repayment agreements secured by oil shipments, limiting sovereignty (Marrero, 2025).

This is not a conquest, but a gradual capture. Beijing avoids open military confrontation, preferring economic influence, alliances with elites, and media influence operations in Spanish. However, the cumulative effect undermines U.S. primacy (Gutiérrez, 2025e).

Section III: U.S. Strategic Messaging

The naval attack should be interpreted as a stratified signaling:

1. Deterrence Theater: Images of U.S. destroyers patrolling the Caribbean evoke the 1989 Operation Just Cause and the constant anti-narcotics patrols of the 1990s. The message: Washington still dominates escalation.

2. Panama as a Litmus Test: The Canal handles approximately 6% of global trade and around 14,000 ships per year. 40% of U.S. containerized trade with Asia passes through its locks (Panama Canal Authority, 2024). Recent drought-related restrictions in 2023-24 reduced the Canal's capacity by as much as 40%, highlighting both its fragility and its global economic centrality (Reuters, 2024). By conducting exercises with Panamanian forces and docking warships in Balboa, Washington underscores that the Canal is beyond the reach of Beijing's ambitions (Gutiérrez, 2025c).

3. Reverberation Strategy: The Panama incursion was the first blow; the deployment in the Caribbean is the echo. Together, they form a hemispheric perimeter defense.

Section IV: The China-Venezuela-U.S. Triangle

China's posture toward Venezuela illustrates its pragmatism. It continues to buy oil, offers symbolic diplomatic support, and provides consumer technology but avoids becoming involved in military commitments (South China Morning Post, 2025).

Russia and Iran, on the other hand, have tested their military support for Caracas but lack the resources to project sustained power in the hemisphere. Beijing, the true competitor, keeps its distance, preferring to strengthen its position in Panama, Brazil, Chile, and now Honduras (Ellis, 2022; Gutiérrez, 2025b, 2025d).

Thus:

• The U.S. treats Venezuela as a dispensable stage.

• China treats Venezuela as a dispensable pawn.

• The real contest is Panama and the Canal.

Section V: Regional Implications

1. Latin American States: Forced to choose between U.S. security guarantees and Chinese financing. Public opinion remains ambivalent: a 2024 Pew survey revealed that 63% of Latin Americans preferred economic ties with the U.S., but elites in countries like Panama, Argentina, and Brazil continue to court Chinese capital (Gutiérrez, 2025d).

2. Allies: The armed forces of Colombia and Brazil view U.S. deployments as a guarantee of Washington's permanence.

3. Adversaries: Russia and Iran face limits to maintaining hemispheric operations; U.S. actions remind them of the limits of escalation.

4. Panama: Local elites, including the Motta family, are divided: some favor U.S. security guarantees, while others value Chinese investments. The Canal is once again a territory of global chessboard (Gutiérrez, 2025c).

Section VI: Risk Assessment

1. Escalation Risks: A miscalculation at sea could trigger an increase in conflict.

2. Overextending Pressure: With commitments in the Indo-Pacific, maintaining a high-intensity posture in the Caribbean could deplete U.S. resources.

3. Chinese Counterattack: Beijing may retaliate by pressuring U.S. companies in Latin America, leveraging supply chain dependencies or offering larger counter-financing packages (Marrero, 2022).

4. Information Domination: Media sponsored by the People’s Republic of China, state-linked influencers, and digital campaigns in Spanish are actively shaping narratives, questioning U.S. stances and amplifying anti-U.S. sentiment.

Section VII: Policy Recommendations

1. Institutionalize Canal Security: Establish a security framework between the U.S. and Panama similar to NATO's Article 5 for the Canal.

2. Fund Alternatives: Expand DFC and IDB loans to weaken Chinese debt diplomacy.

3. Digital Sovereignty: Launch a U.S.-led regional telecommunications initiative to offer alternatives to Huawei.

4. Media and Influence Operations: Expand support for think tanks, academics, and media to counter Chinese narratives and disinformation.

5. Military Posture: Maintain naval rotations in the Caribbean and Pacific while reinforcing SOUTHCOM intelligence presence.

6. Regional Coalition: Build a trilateral/multilateral security pact with Colombia, Brazil, Argentina, and Panama to demonstrate that hemispheric defense is collective, not unilateral.

Conclusion

The naval attack on a Venezuelan ship is a hemispheric signal. M

Venezuela is the spark, Panama the fuse, and China the powder keg.

For U.S. credibility to endure, displays of power must also be accompanied by economic, digital, and institutional commitment. Only then can Washington ensure that Panama's impact in the Caribbean resonates as a clear message: The United States remains the guardian of the hemisphere.

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