Panama has been us aligned and a huge trading partner since the late 80s. We don't have any mutual military aid pact or anything but we give them a substantial amount of aid and they give us favorable trading conditions through their sovereign property.
They are a sovereign state. They get to build relations with whoever they want. That's how sovereignty works. The way you win those countries over is with the use of soft power, something that China understands but seems to be outside the grasp of the current admin, who is banging around like a band of drunken apes.
They must abide by treaties, so no they don’t get to build relations with whoever they want. The canal’s handover came with requirements. If they don’t want to uphold those, and treaties mean nothing, why would their sovereignty be respected? But I do agree soft power is better and that the US government has poor strategy here and in general.
Also I’m not sure what you mean by “huge trade partner”. Panama isn’t even in the top 20 trade partners of the US.
You're somewhat mistaken with this assessment. The modern convention is that any treaty can be annulled simply by one of the parties declaring "what kind of idiot would have made this treaty".
It's worthwhile to stay informed on how modern global norms treat treaties.
They are a sovereign state. They get to build relations with whoever they want. That's how sovereignty works. The way you win those countries over is with the use of soft power, something that China understands but seems to be outside the grasp of the current admin, who is banging around like a band of drunken apes.