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Shares of United Parcel Service plunged more than 15% Thursday after the company issued weak revenue guidance for the year and said it planned to cut deliveries for Amazon, its largest customer, by more than half.

The shipping giant said in its fourth-quarter earnings report that it “reached an agreement in principle with its largest customer to lower its volume by more than 50% by the second half of 2026.”

At the same time, UPS said it is reconfiguring its U.S. network and launching multiyear efficiency initiatives that it expects will result in savings of approximately $1 billion.

UPS CEO Carol Tome said on a call with investors that Amazon is UPS’ largest customer, but it is not the company’s most profitable customer. “Its margin is very dilutive to the U.S. domestic business,” she added.

“We are making business and operational changes that, along with the foundational changes we’ve already made, will put us further down the path to become a more profitable, agile and differentiated UPS that is growing in the best parts of the market,” Tome said in a statement.

Amazon spokesperson Kelly Nantel told CNBC in a statement that UPS had requested a reduction in volume “due to their operational needs.”

“We certainly respect their decision,” Nantel said in a statement. “We’ll continue to partner with them and many other carriers to serve our customers.”

Amazon said before the UPS announcement that it had offered to increase UPS’ volumes.

UPS forecast 2025 revenue of $89 billion, down from revenue of $91.1 billion in 2024. That is well below consensus estimates for 2025 revenue of $94.88 billion, according to analysts polled by LSEG.

For the fourth quarter, UPS missed on revenue, reporting $25.30 billion versus $25.42 billion analysts anticipated in a survey by LSEG.

Amazon has long relied on a mix of major carriers for deliveries, including UPS, FedEx and the U.S. Postal Service. But it has decreased the number of packages sent through UPS and other carriers in recent years as it looks to have more control over deliveries.

Amazon has rapidly built up its own logistics empire since a 2013 holiday fiasco left its packages stranded in the hands of outside carriers. The company now oversees thousands of last-mile delivery companies that deliver packages exclusively for Amazon, as well as a budding in-house network of planes, trucks and ships. By some estimates, Amazon’s in-house logistics operations have grown to rival or exceed the size of major carriers.

UPS has, for its part, taken more aggressive cost-control measures, including catering to more profitable delivery customers. On the investor call, Tome highlighted health care; small business; international; and business-to-business, or B2B, as “the best parts of the market” that it has leaned into more heavily. In recent quarters, UPS has benefited from an influx of volume from bargain retailers Temu and Shein, which have rapidly gained popularity in the U.S.

Last January, UPS laid off 12,000 employees as part of a bid to realize $1 billion in cost savings.

This post appeared first on NBC NEWS

Sports bar chain Twin Peaks starts trading Thursday on the Nasdaq using the ticker “TWNP,” making it the first restaurant initial public offering of the new year and a potential litmus test for others looking to go public.

The IPO market has been tepid for several years, particularly for consumer companies. Soaring inflation, higher interest rates, cautious consumers and the risk of lower valuations scared many companies away from going public. Market conditions meant that some companies chose to seek a sale rather than trying their luck with the public markets. Even the rare success, like Cava’s IPO, didn’t convince others to follow its path.

But many are hopeful that the IPO market will thaw this year.

“Last year was a stronger year than 2023, and we’re expecting 2025 to have more IPOs than 2024,” said Nick Einhorn, vice president of research for Renaissance Capital, a provider of pre-IPO research and IPO-focused ETFs. “That could certainly include more consumer IPOs.”

Twin Peaks won’t be the first consumer company to make the leap this year — and that debut may not inspire confidence.

Pork producer Smithfield Foods, a subsidiary of Hong Kong-based WH Group, began trading on Tuesday. Shares fell 7% from its IPO price of $20 during its market debut. The company had already downsized its offering by 8.1 million shares and priced below its marketed range. Smithfield’s challenges include its ties to China, U.S. trade tensions with Mexico and proposed immigration policies that would raise its labor costs.

For its part, Twin Peaks, a Hooters rival known for its revealing uniform, is relatively small, with an estimated equity value of $1.04 billion to $1.28 billion and 115 restaurants, according to an investor presentation published by owner Fat Brands. (Fat Brands and its chair Andy Wiederhorn were criminally indicted last year for an alleged $47 million bogus loan scheme; both have denied the charges.)

Fat Brands is spinning off Twin Peaks and plans to use the cash to pay off the debt on its balance sheet.

Here are three other restaurant companies that are watching the IPO market for their chance to go public:

JAB Holding, the investment arm of the Reimann family, has been looking to offload Panera Brands, the parent company of Panera Bread and Einstein Bros. Bagels, from its portfolio for several years. JAB originally took Panera Bread private in 2017 for $7.5 billion.

In 2021, Panera announced an investment from Danny Meyer’s special purpose acquisition company that would help the company go public. But the two parties called off the deal by mid-2022, citing market conditions.

A year and half later, in December 2023, Panera Brands confidentially filed to go public. Six months after the confidential filing, the company announced a CEO transition and tied the shakeup to “preparation for its eventual IPO.”

However, a public filing never followed. The restaurant industry began to see a pullback in spending, as many consumers opted to cook at home instead of dining out at eateries.

Plus, Panera’s Charged Lemonade went viral for all of the wrong reasons; the company removed the highly caffeinated drink from its menu after multiple wrongful death lawsuits tied to it. Panera settled with the first plaintiff in October.

Earlier this month, Panera’s CEO resigned, and the company tapped its chief financial officer to step in as interim chief. With its leadership in flux, it looks unlikely that Panera will try to go public again this year.

A year and half ago, Bain Capital announced that it is buying Fogo de Chao, a fast-growing Brazilian steakhouse chain. Like Krispy Kreme, Sweetgreen and Dutch Bros., the chain had filed to go public in 2021 — but it missed the window. 

Fogo de Chao has over 100 locations globally and 76 in the U.S. alone. The company plans to open another 15 restaurants this year.

Whenever the IPO market is ready, so will Fogo de Chao.

“If the optionality is there, then we’ll launch,” Fogo de Chao CEO Barry McGowan told CNBC at the ICR Conference in Orlando earlier in January. “My hope is, this year, we’ll see what happens to the consumer markets. I think it’s going to get started this year or in the next year.”

McGowan joked that Fogo de Chao’s longtime CFO Tony Laday has filed more S-1 filings than any other chief financial officer; the company filed three the first time it went public, and seven before Bain bought it.

Thanks to Bain’s investment, Fogo de Chao isn’t in a rush to go public.

“We’re not in a hurry to go. We don’t want to file seven more times. We want to be more certain before we file,” McGowan said.

Roark Capital assembled Inspire Brands by cobbling together a slew of acquisitions into a restaurant conglomerate.

Inspire’s portfolio includes Arby’s, Jimmy John’s, Sonic, Buffalo Wild Wings, Dunkin’ and Baskin Robbins. Across all of its brands, it has more than 32,600 restaurants globally and totals $30 billion in system sales.

Nearly a year ago, Bloomberg reported that Roark was in early-stage IPO discussions with potential advisers and seeking a valuation of $20 billion for Inspire. But it’s been crickets since then.

Still, Pitchbook identified Inspire Brands as one of 50 private equity-backed names that could go public in 2025.

“Obviously, private equity backers will want to exit their position eventually, and IPOs are often a way to do that,” Einhorn said.

And unlike Panera, Inspire has a stable leadership team. CEO Paul Brown co-founded the company and has held his role since 2018. CFO Kate Jaspon joined Inspire in 2021 after it acquired her employer Dunkin’. More than a decade ago, she was a vice president at Dunkin’ during its own IPO.

This post appeared first on NBC NEWS

The extent of the impacts of the Trump administration’s sudden 90-day freeze of almost all foreign aid is still unclear almost a week on, as officials and aid workers overseas try to make sense of which activities must be suspended.

The suspension of foreign aid was outlined in a diplomatic cable from Secretary of State Marco Rubio last Friday.

Contractors working with USAID – many of them US-based companies and small businesses – often front the money for aid work, then submit invoices and get reimbursed later.

Now, some are not being paid for millions of dollars’ worth of services already rendered, the aid industry source said. That means there will be significant furloughs of staff at many aid contractors and subcontractors.

“We were told to lay off all of our staff,” said Annie Feighery, the CEO of mWater, a US company that provides a free digital platform to governments and organizations around the world to help improve access to water. She said that as a subcontractor, the firm is “carrying a debt load of our projects” and has not yet been paid for work done in January.

The USAID stop-work order has taken out 80% of her company’s budget, she said.

“It’s going to put a lot of small businesses out of work,” Feighery said, noting that mWater staff in Indonesia, Haiti, Kenya, Uganda and the US are impacted. “If we’re allowed in May to go back to work, we will have to do the work in May and get paid in June… It’s horrific, you know, to imagine any company going two quarters without their funding.”

She added that companies working in the technology aid space are also concerned about other nations, like China, stepping in to fill the void during the 90-day pause on foreign aid. Foreign governments using data systems that are US-based, like those of mWater, is better than having them run on Chinese technology, she argued.

Widespread confusion over waiver for ‘humanitarian aid’

The State Department said in a media note on Wednesday that the freeze does not include humanitarian aid, “which is defined as ‘life-saving medicine, medical services, food, shelter, and subsistence assistance, as well as supplies and reasonable administrative costs as necessary to deliver such assistance.’”

The note also claimed that “critical national security waivers have been granted, including to ensure the protection of US personnel overseas, facilitate the repatriation of illegal aliens, enforce non-proliferation obligations, and much more.”

The State Department claimed it had “provided straightforward guidance” about waivers to the freeze last Friday.

The official said that even though the waiver gives an exemption for ‘life-saving humanitarian aid,’ it’s not clear if that includes funding for staffers who carry out the work. Their organization has been unable to withdraw US funds at all, and is exploring whether to put staff on furlough, because it doesn’t have cash reserves to pay people.

USAID funds foreign aid projects in more than 100 countries around the world. Other agencies like the State Department, Department of Health and Human Services, Defense Department, Treasury and the Peace Corps also control portions of the US foreign aid budget.

Foreign assistance has been the target of ire from Republicans in Congress and Trump administration officials, but the funding accounts for very little of the overall US budget, at about 1% of federal budget obligations.

“The administration is asking a lot of the right questions, but they’re asking them the wrong way, and in far too of an abrupt fashion that’s far more disruptive to the lives and livelihoods of human beings around the world than it could be,” said John Oldfield, the chief executive of Accelerate Global, which advises nonprofits and companies working in global development.

“The sick are getting poorer and the poor getting sicker,” Oldfield said of the developing world. “People are losing their jobs. People are losing their livelihoods. This is happening right now, even within the first 48 or 72 hours after these decisions by the White House.”

Concerns about development aid

A source working in the US foreign aid industry stressed that the humanitarian aid waiver does not include most development aid, which also saves lives, for example through improving water security, food security, sanitation and hygiene.

“Development aid is longer-term work and that is still on pause,” said the source, who asked not to be named for fear of reprisals.

In many cases, the stop-work orders stemming from the US State Department aid freeze have suspended projects that are done in support of US security and global security interests, according to aid workers.

The World Council of Credit Unions, headquartered in Wisconsin, said in a statement Wednesday that following the stop-work orders, it had suspended a USAID project in Peru and Ecuador that helps Venezuelan refugees with credit lending, savings, and with obtaining “documentation that allows them to integrate into their local economies, thereby stemming their migration to the US.”

The international credit organization also said it had suspended work on its USAID GROW Project in Ukraine, which “supports agricultural production and food security, an area Ukraine is central to in supporting the global food chain.”

Funding halt to HIV programs

“A funding halt for HIV programmes can put people living with HIV at immediate increased risk of illness and death and undermine efforts to prevent transmission in communities and countries. Such measures, if prolonged, could lead to rises in new infections and deaths, reversing decades of progress and potentially taking the world back to the 1980s and 1990s when millions died of HIV every year globally, including many in the United States of America,” the WHO said in a statement.

“We call on the United States government to enable additional exemptions to ensure the delivery of lifesaving HIV treatment and care.”

The chief executive of the Gates Foundation, Mark Suzman, said in a statement: “US assistance programs, such as PEPFAR, deliver life-saving medicine, medical care, and combat hunger and starvation. These programs protect the health of Americans, bolster US national security, and build stronger economies.”

The foundation is committed to working with the administration on these issues, he added, “and encourage them to ensure this critical funding continues immediately while their reviews are underway.”

This post appeared first on cnn.com

Chaotic scenes surrounding the release of Israeli and Thai hostages in Gaza on Thursday brought condemnation from Israeli leaders and a temporary delay in the release of Palestinian prisoners, who were ultimately released later in the day.

Israeli Prime Minister Benjamin Netanyahu postponed by several hours the agreed release of 110 Palestinian detainees, including dozens of minors, after live images were broadcast across Israel of a crowd of thousands jostling and cheering as the hostages were handed over to the Red Cross in the central Gazan city of Khan Younis.

He described those scenes as “shocking,” and demanded guarantees from those who mediated a ceasefire deal – Qatar, Egypt and the United States – that the incident would not be repeated.

The release Thursday morning of the captive Israeli soldier Agam Berger in Jabalya, northern Gaza, had gone off without incident – a stage-managed affair in which Hamas militants paraded her in front of cameras and then handed her to representatives from the International Committee for the Red Cross.

But the release in the early afternoon of two Israeli and five Thai civilians produced some of the most stunning images of the nearly two-week-old ceasefire, striking a painful nerve for much of the Israeli public.

Unusually, that handover was a joint affair between Hamas and several allied militant groups. Thousands of Gazans crowded in Khan Younis as Hamas and its allies staged the handover outside the razed house of former Hamas leader Yahya Sinwar, killed by Israeli forces in October.

Among those released was Arbel Yehoud, a 29-year-old civilian whom militants abducted from her home in the Nir Oz kibbutz on October 7, 2023. She was held captive by the militant group Palestinian Islamic Jihad. Stepping out from a white van, the Israeli civilian looked gaunt and frightened. As militants walked her through a roaring crowd, she kept her head locked forward as her eyes darted left and right. The crowd jostled her back and forth as she made her way toward a waiting Red Cross vehicle.

Yehoud was returned to Israel without further incident. But for many in Israel, the images sparked fears of a repeat of an infamous, televised incident in which two reservist Israeli soldiers were killed by a Palestinian mob in the occupied West Bank, after they stumbled onto the funeral of a child whom Israeli troops had killed the previous day, and following the killing of more than 100 Palestinians.

Fifteen hostages have been released since a ceasefire went into effect earlier this month. Their freedom has brought some relief to a nation traumatized daily by images of civilians and soldiers held captive since October 7, 2023.

But that solace has accompanied by astounding images of Hamas militants’ elaborate handover ceremonies – clearly designed to show that the group is still standing, despite the Israeli government’s promises of “total victory” over the perpetrators of the deadliest attack on Jews since the Holocaust.

Finance Minister Bezalel Smotrich, a right-wing extremist who has threatened to withdraw from the governing coalition, has cited Hamas’s presence on the streets of Gaza as proof that Israel must return to war, saying that it was proof “of the heavy and terrible price Israel is paying for this bad deal.”

110 Palestinians released

Just as night fell, the Israeli prison authority released 110 Palestinians from Ofer Prison in the occupied West Bank, including a prominent former militant leader from the embattled city of Jenin.

In the West Bank town of Beitunia, which overlooks Ofer Prison, the Israeli military on Thursday shut down public celebrations by Palestinians over the detainees’ release, as has repeatedly been the case.

Israeli troops fired rubber bullets and tear gas to clear a small crowd, and dropped Arabic-language flyers warning onlookers that “the security forces will not allow demonstrations in support of terrorist organizations.”

The release was met with jubilation in the streets of Ramallah, where hundreds gathered to meet some of the released detainees. Many of those gathered there chanted in support of Hamas’ military wing, Al-Qassam Brigades. A smaller crowd of Fatah supporters has gathered on a nearby hill.

Among those freed were 30 children – some held without charge and none convicted, according to Adalah, a legal aid organization. Also released were 32 prisoners sentenced to life imprisonment and 48 prisoners with “high sentences.” Some of those with serious sentences were due to be released to Egypt, as per the terms of the ceasefire deal agreed to in Doha.

The most prominent to be released on Thursday was Zakaria Zubeidi, former commander of Al-Aqsa Martyrs Brigade, the military wing of the Fatah party, which governs the West Bank. His mother, brother, and son have all been killed by the Israeli military. Zubeidi rose through the ranks of the militant group during the Second Intifada in the early 2000s.

A former child actor, Zubeidi co-founded The Freedom Theatre in his hometown of the Jenin Refugee Camp following that conflict, to promote cultural education among his compatriots.

He was arrested in 2019 and charged with involvement in shooting attacks against Israelis. He gained near cult status among many Palestinians after he was among a group who tunneled out of Israel’s high security Gilboa prison in 2021, before being re-arrested several days later.

Mohammad Al Sawalhi, Tareq Al Hilou, Eugenia Yosef, Lauren Izso, Dana Karni and Khader Al-Za’anoun, a journalist with WAFA, the official Palestinian news agency, contributed reporting.

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Mexico’s President Claudia Sheinbaum sent a letter to Google contesting the tech giant’s decision to comply with US President Donald Trump’s order to rename the Gulf of Mexico as the Gulf of America.

President Sheinbaum showed the letter to reporters Thursday saying, “In the case of Mexico, where are we completely sovereign? In the area established as 12 nautical miles from the coastline, and this applies to all countries worldwide.”

“If a country wants to change the designation of something in the sea, it would only apply up to 12 nautical miles. It cannot apply to the rest, in this case, the Gulf of Mexico. This is what we explained in detail to Google.”

Referring to a previous counterproposal she made to Trump to rename the US, Sheinbaum added, “In the end, we requested that when someone searches for ‘América Mexicana’ in the search engine, the map we previously presented should appear.” That map, from 1607, labeled parts of North America “Mexican America” and was shown during a press conference earlier this month.

On Monday, Google announced that Google Maps users in the US would see the body of water known as the Gulf of Mexico renamed as the Gulf of America. Google said its move was in line with its “practice of applying name changes when they have been updated in official government sources.”

Users in Mexico will continue to see the “Gulf of Mexico” on Google Maps. The rest of the world will see both names.

Google will also change the name of Mount McKinley, the nation’s highest peak, from Denali. Former President Barack Obama renamed the Alaska landmark to Denali in 2015 as a nod to the region’s native population.

Both changes stem from an executive action that Trump signed shortly after taking office last week, saying the changes “honor American greatness.”

“It is in the national interest to promote the extraordinary heritage of our Nation and ensure future generations of American citizens celebrate the legacy of our American heroes,” the executive order said.

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Migrant workers in Canada have been exposed to “shocking abuse and discrimination” while working under the country’s Temporary Foreign Worker Program (TFWP), according to a new report by Amnesty International.

In the report published Thursday, Amnesty criticized the structure of Canada’s TFWP, which allows employers to hire migrant workers for primarily low-paid jobs across sectors including agriculture, food processing, construction, and hospitality.

The human rights organization said laborers were vulnerable to abuse through “harmful provisions” in the program, including closed work permits that tie workers to a single employer who controls both their migration status and labor conditions.

Amnesty interviewed 44 migrant workers from 14 countries for the report, predominantly from what it termed the Global South, with most workers reporting unpaid wages and excessive hours. Some workers told Amnesty their contracts stipulated zero rest days.

Many workers said they suffered discrimination at work, including being tasked with the hardest physical jobs. Some workers said they suffered severe injuries or developed medical conditions due to unsafe working conditions.

One woman from Cameroon, Bénédicte, told Amnesty she had suffered racist psychological and sexual abuse at the hands of her employer while working on a two-year closed work permit on a farm.

After leaving the farm in July 2018, her employer canceled her work permit, leaving Bénédicte with an irregular migration status. “I did not expect to be a slave here,” she told Amnesty.

Another worker told Amnesty he faced “severe forms of control” by his employer.

Miguel, a Guatemalan migrant worker with a two-year visa under the TFWP, told Amnesty he was threatened and surveilled. He said his boss confiscated his passport and placed cameras in the container where he lived and the garage where he worked.

“The abuse experienced by migrant workers in Canada is deeply troubling, especially for a country that claims to be a leader when it comes to protecting human rights,” Erika Guevara-Rosas, senior director for research, advocacy, policy and campaigns at Amnesty International, said.

Amnesty also said many workers reported living in inadequate housing conditions, with a few saying they did not have drinking water in their accommodation.

An official at Amnesty International Canada, Ketty Nivyabandi, called on Canada’s leaders to implement reforms to “bring the program in line with Canada’s human rights obligations – and, ultimately, to respect the rights of workers.”

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Doctors say 2-year-old Habiba al-Askari has days to live as gangrene creeps up her arms and legs, and only an urgent medical evacuation out of Gaza may save her life.

She has a rare genetic condition: a protein C deficiency which causes excessive blood clotting and can lead to a slow death. The condition is highly treatable – but not in Gaza, where healthcare institutions and supplies have been decimated by Israel’s yearslong war in the Palestinian enclave.

Earlier this month, international aid groups worked through the complex process of obtaining permission from Israeli authorities to allow Habiba to leave Gaza for treatment.

Habiba is one of at least 2,500 children in Gaza in urgent need of medical evacuation, according to the UN. Under the recently signed ceasefire and hostage release deal between Israel and Hamas, which controls Gaza, Israeli authorities are supposed to increase the number of Gaza residents allowed out for treatment.

But no medical evacuations from Gaza have taken place for two weeks. The last evacuation was on January 16, when just 12 patients were evacuated to European countries, according to the World Health Organization. Approximately 12,000 people in Gaza are still awaiting medical evacuation, according to the UN.

Doctors warn of amputation

On Thursday morning, Habiba was admitted to an intensive care unit in Gaza with a suspected lung infection. Surrounded by foreign and local doctors scrambling to keep her alive, she lay barely conscious, moaning in pain between each labored breath.

Gangrene can lead to sepsis — an infection spreading to the bloodstream — that raises the risk of rapid organ failure and death.

Dr. Kuziez first treated Habiba several weeks ago, in Gaza City, and oversaw her care as medics waited for Israeli permission to move her south, a first step in the evacuation process.

But as soon as he landed back in the US, he received news of the dramatic deterioration in her condition. “I’m trying to be there to support the mom, to try and provide whatever medical advice we can provide,” he said, choking back tears.

“But in the back of my mind, I am worried it may have gotten too far. There’s still hope for her, but it’s just decreasing by the minute.”

He’s tormented by the knowledge that Habiba’s condition could have been treated in time, if she had had access to the right facility. When Dr. Kuziez left Gaza, he recalled, “my heart wanted to just take her with me in my arms and run across the border with her.”

Blocking her evacuation will be a death sentence, he warned. “For anybody with medical knowledge, it seems like a deliberate push to essentially kill this child. There’s no other way to describe it. This child needs emergency critical care.”

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“It is with deep sadness that we announce the death of the singer, songwriter and actress Marianne Faithfull. Marianne passed away peacefully in London today, in the company of her loving family. She will be dearly missed,” the statement said.

Faithfull was known for her 1960’s hits including “As Tears Go By” which was written by The Rolling Stones’ Keith Richards and Mick Jagger, whom she also famously dated.

She was discovered at a party in London by The Rolling Stones’ manager Andrew Loog Oldham in 1964 and was just 16 years old when “As Tears Go By” was released, according to her biography on her official website.

She has been making music for over 50 years, and was also an actress in the film Girl on a Motorcycle which came out in 1968 as well as Hamlet in 1969 and others.

But at the end of the 1960s she had fallen into a deep battle with drug addiction which would endure for years, according to her bio, before mounting a series of creative comebacks in the following decades.

In 2020, it was announced that Bohemian Rhapsody star Lucy Boynton would play Faithfull in a biopic about her life. At the time Faithfull said she was “delighted that my story is finally being made with my dream team.”

In 2021 Faithfull wrote an album during Covid-19 lockdown, a period in which she also struggled with a severe Covid-19 infection.

Faithfull reflected on her extraordinary and turbulent life in a memoir released in 1994.

“Never apologize, never explain – didn’t we always say that? Well, I haven’t and I don’t,” she wrote to readers in the book, titled Faithfull.

According to Reuters, Faithfull was 78 years old.

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Secretary of State Marco Rubio embarks soon on his inaugural trip as the United States’ top diplomat. His first stop, Panama could prove to be the most contentious on the itinerary following President Donald Trump’s repeated demands for control of the Panama Canal.

“Panamanian sovereignty over the canal is clear. There is no discussion on this issue. The soul of a country is not up for discussion,” Panama President José Raúl Mulino emphasized on Thursday, just days ahead of his scheduled meeting with Rubio.

Yet the Trump administration doesn’t seem to be letting this go. In his inauguration speech, Trump mentioned Panama six times, more than any other foreign country. He and Republican allies are increasingly painting a dark scenario where the Panama Canal has secretly fallen under Chinese military control – arguing that’s why the US needs to seize the canal back from Beijing’s clutches.

“A foreign power today possesses, through their companies, which we know are not independent, the ability to turn the canal into a choke point in a moment of conflict,” Rubio himself insisted during his Senate confirmation hearings this month.

“That is a direct threat to the national interest and security of the United States,” he added.

As ominous as it all sounds, the reality is not so straight forward. Here is a fact check about claims Trump’s administration has made about the Panama Canal.

Is the Panama Canal under Chinese control?

Trump has long complained about the “bad deal” Jimmy Carter made when he returned the canal to Panama in 1977. But he’s been ratcheting up the rhetoric and falsehoods from the very start of his second term.

“Panama’s promise to us has been broken,” Trump said during his inaugural speech. “Above all China is operating the Panama Canal and we didn’t give it to China, we gave it to Panama and we are taking it back!”

On his Truth Social network, Trump has also claimed – without proof – that Chinese soldiers have been deployed to the canal and that “Panama is, with great speed attempting to take down the 64% of signs which are written in Chinese. They are all over the Zone.”

But the “Zone” – a former American enclave bordering the canal – hasn’t existed since 1979.

And if the scenario Trump describes sounds like the plot of a movie, well, it was. In the 2001 movie “The Tailor of Panama,” which starred Pierce Brosnan and Geoffrey Rush, the US invades Panama after receiving bogus intelligence that China is trying to secretly buy the canal.

In reality, since 2000 the canal has been operated by the Panama Canal Authority, whose administrator, deputy administrator and 11-member board are selected by Panama’s government but operate independently.

The majority of the canal’s employees are Panamanians and Panama designates which companies are awarded the contracts to run the ports near the canal. Ships transiting the 50-mile-long canal are required to be piloted by local captains that work for the Canal Authority.

While there is real concern about increased Chinese investment in Latin America, Panama included, to date there is no evidence of Chinese military activity in Panama. At his press conference on Thursday, Mulino said the US government has yet to provide his administration with any proof they had gathered of Chinese control of the canal.

So what does Rubio mean by ‘a foreign power’ in the Panama Canal?

The Trump administration seems to be pointing to the fact that Panama Ports – part of a subsidiary of the Hong Kong-based conglomerate CK Hutchison Holdings – operates terminals on the Atlantic and Pacific sides of the canal. So do several other companies.

Hutchinson was first granted the concession over the two ports in 1997 when Panama and the US jointly administered the canal. That same year, control of Hong Kong – where Hutchinson is based – was transferred from the United Kingdom to China.

While falling under Beijing’s sphere of influence, Hutchison is hardly some murky Chinese military front company. It’s publicly traded, not known to be on any US blacklists and their subsidiary Hutchinson Ports is one of the world’s largest port operators, overseeing 53 ports in 24 countries, including for other US allies such as the UK, Australia and Canada.

Crucially, Hutchison does not control access to the Panama Canal. Workers at their two ports only load and unload containers onto ships and supply them with fuel. And they’re not the only ones – three other ports in the vicinity of the canal are operated by competing companies providing similar services.

Since Trump’s comments, Panama’s government has announced an audit of the Hutchison-owned Panama Ports. The company says it is complying fully and has even invited Rubio to visit its ports.

The State Department would not comment if Rubio planned to accept the invitation to visit what the Trump administration has described – incorrectly — as a de facto Chinese military outpost in Panama.

Under the 1977 treaty with Panama, the US returned the canal with the understanding that the waterway remain neutral.

According to the agreement, the US could intervene militarily if the canal’s operations were disrupted by internal conflict or a foreign power. This seems to be what Trump is referencing when he threatens to “take the canal back.”

But it would be hard to argue that the waterway’s operations are disrupted or endangered. Following the expansion of the canal, which began in 2007 and Panama financed at a cost of more than $5 billion, more cargo than ever runs through the canal than it did during the years of US administration.

A US occupation of the canal would fly in the face of international law and the treaty the US agreed to.

Ok, but theoretically what would happen if the US tried to take the Panama Canal?

Since the 1989 US invasion that deposed dictator Manuel Noriega, Panama does not have an army but Panamanians are fiercely protective of the canal which is central to their national identity. And despite the saber rattling coming from the Trump administration, attempting to force the issue would pose major complications for two other top US priorities: migration and the economy.

The canal isn’t the only critical passageway that Panama controls. Threatening Panama militarily could throw open the Darien Gap, the jungle crossing where hundreds of thousands of migrants make their way north from South America to the US.

Mulino had promised to close the gap to northbound migrants with Trump’s help – but don’t count on him honoring old commitments if US boots touch Panamanian soil.

Americans would also feel the heat. At least 25,000 US citizens live in Panama who would likely be placed in harm’s way by any US military action to seize the canal. Disruption of the canal’s operations would likely send prices of US goods from automobiles to sneakers soaring – about 40% of US container traffic passes through the waterway.

And of course, backing out of a decades-old deal and trying to wrest the canal back by force from an ally would be a propaganda goldmine for Russia and China which have both called for maintaining neutrality in the canal.

Any US military action would also further inflame tensions in Latin America where mass deportations have already tested Washington’s partnerships in the region.

Trump’s dream of flying a US flag over the Panama Canal would come at a much higher cost than he appears to have calculated.

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