Rubio warns Panama of U.S. retaliation if China's canal influence remains

• The trip to Panama is Rubio's first abroad since being sworn in as secretary of state.

Driving the news: Since winning a second presidential term last November, Trump has tripled down on his demands regarding the Panama Canal, and hasn't ruled out using military force to obtain control of it.

• His demands include U.S. ships paying lower rates to use the canal — after claiming that Panama charges American ships more than other nations.
• Trump's complaints are partially based on the fact that a Hong Kong-based company has a contract for running the canal, which has been under Panama's control since 1999.
• Mulino has so far rejected Trump's demands to hand over control of the canal back to the United States.

What they are saying: Rubio told Mulino and Martínez-Acha that Trump has made "a preliminary determination" that the current Chinese influence over the Panama Canal area is a threat to the canal, State Department spokeswoman Tammy Bruce said in a statement.

• Rubio said that it is also a violation of the treaty between the U.S. and Panama which defines the neutrality and operation of the canal. 
• "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," Bruce said.

The other side: After his meeting with Rubio, Panama's president told reporters his country won't give up the control over the canal, but stressed that the government is going to conduct an audit of Chinese operated ports on both sides of the canal and present the findings to the U.S.

• Mulino also said Panama will not renew its agreement with China about Beijing's Belt and Road initiative, that will expire next year and will check if it can get out of it sooner.

Go deeper: Trump dreams of empire expansion

Editor's note: This article has been updated with comment from Panama President José Raúl Mulino.