Panama's President Juan Carlos Varela on Sunday asked the United States to respect his country's sovereignty after the US recalled its envoys from three regional countries for switching diplomatic ties from Taiwan to China.
"We respect the sovereign decisions of other countries and we will always ask the same respect for ours," Varela said in a statement.
The United States on Friday recalled its envoys from El Salvador and the Dominican Republic, as well as its charge d'affaires from Panama, to protest the diplomatic switch.
Those countries have said their decision reflected simple economic realities -- big, fast-growing China has been spending billions to build ports, rail lines and other projects across Latin America.
Taiwan and China have been engaged for years in a diplomatic tug-of-war in developing countries, with aid and economic support often used as bargaining chips to gain diplomatic recognition.
Beijing sees self-ruling, democratic Taiwan as part of its territory and has not ruled out using force to bring it into the fold.
But Washington, now engaged in a trade war against Beijing, accuses the Chinese of trying to use aid to drive a wedge between Taipei and its Western Hemisphere partners.
Varela said that the United States and Panama would always work together "in the fight against organized crime, drug trafficking and terrorism" while supporting democracy and freedom.
As "a sovereign country, we will always make our decisions" based on Panama's own interests, he said.
The United States is Taiwan's most important unofficial ally and chief provider of military equipment, though the relationship has at times been tricky since Washington in 1979 established diplomatic relations with China and formally ended them with Taiwan.