Panama offered to end its memorandum of understanding with China’s Belt and Road Initiative on Sunday after Secretary of State Marco Rubio threatened possible retaliation if the Central American country didn’t work more closely with the U.S.

The 2017 agreement with China pertains to the Panama Canal, which President Donald Trump claims the Chinese government controls. Panamanian president José Raúl Mulino said it would not renew its deal with China after it expires. Renewable every three years, the memorandum of understanding is automatically extended another three years unless terminated by either Panama or China.

Through its Belt and Road global development project, China has invested heavily in the area surrounding the Panama Canal in recent years and currently operates two ports on either side of the 50-mile canal through the Hong Kong-based Hutchison Port Holdings.

Before taking office, Trump said he would not rule out using military action or economic coercion to retake the Panama Canal and counter Chinese influence in the region.

In his first foreign visit as secretary of state, Rubio echoed Trump’s stance in his conversations with Mulino. The cabinet appointee said China’s perceived control over the Panama Canal area violates a treaty that guaranteed permanent neutrality and operation of the canal.

“Secretary Rubio informed President Mulino and Minister Martínez-Acha that President Trump has made a preliminary determination that the current position of influence and control of the Chinese Communist Party over the Panama Canal area is a threat to the canal and represents a violation of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal,” the State Department said in a summary of the diplomatic meeting.

“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 added.

In 1977, former President Jimmy Carter signed the treaty and relinquished control of the canal to Panama. The agreement was completed on December 31, 1999. Between 1904 and 1914, the U.S. fully built the Panama Canal.

Rubio said the U.S. “cannot, and will not, allow the Chinese Communist Party to continue with its effective and growing control over the Panama Canal area,” he posted on social media of his meeting with Panamanian leaders. The secretary of state noted he also discussed collaborative efforts to end illegal immigration and ensure fair competition for U.S. firms.

While Rubio warned of potential U.S. action if Panama does not comply, Mulino said there was “no real threat of retaking the canal or the use of force.” Describing his talks with Rubio as “respectful” and “positive,” Mulino said no real threat was made against the treaty in which the U.S. handed over the canal to Panama.

Concurrent with Trump’s plans to regain ownership of the canal, House Republicans introduced a bill to repurchase it. If passed and signed into law, the bill would give Trump authority to work with Rubio to “initiate and conduct negotiations with appropriate counterparts of the Government of the Republic of Panama to reacquire the Panama Canal,” according to its text.

Of strategic importance to the U.S., the Panama Canal provides passage to about 72 percent of vessels that are either sailing from or to U.S. ports. Without access to the water strip, ships are forced to travel some 8,000 miles around South America.

Before his visit to Panama, Rubio warned China could shut down the crucial shipping route if it entered a conflict of some sort with the U.S. After Trump imposed a 10 percent tariff on China on Saturday, its government vowed retaliation.

“If the government in China in a conflict tells them to shut down the Panama Canal, they will have to,” he told conservative media personality Megyn Kelly last week. “And in fact, I have zero doubt that they have contingency planning to do so. That is a direct threat.”