The United States has reaffirmed Panama’s sovereignty over the Panama Canal during U.S. Defense Secretary Pete Hegseth’s recent visit, the first by a Pentagon chief in decades. Despite strong rhetoric from Washington, Hegseth emphasized mutual cooperation and strategic importance of the canal, stating it will be secured by both Panama and the U.S., not China.
The visit included new agreements to deepen military training and security ties. While the English-language statement from the Pentagon omitted it, Panama's Spanish version highlighted U.S. recognition of Panama’s "inalienable sovereignty" over the canal. Hegseth reiterated this sentiment before departing Panama City, expressing gratitude for the country's invitation to host U.S. troops for joint exercises. However, Panama’s Public Security Minister Frank Abrego made clear that permanent U.S. bases would not be allowed.
The Panama Canal is vital for global trade, handling over 40% of U.S. container traffic, worth around $270 billion annually. Concerns about China’s growing presence in Panama, particularly through infrastructure owned by Chinese firms, have raised U.S. security alarms. Hegseth noted efforts to reduce "malign" Chinese influence, aligning with President Trump’s more aggressive stance, which hasn't ruled out military options to protect canal access.
Panama’s President Jose Raul Mulino, who met with Hegseth, has been a strong partner in countering Chinese influence. In February, Mulino formally withdrew Panama from China’s Belt and Road Initiative and supported Trump’s immigration crackdown. U.S. officials described Mulino as cooperative and understanding of regional security dynamics.
While the canal was handed over to Panama in 1999, it remains a critical geopolitical asset. The U.S. continues to emphasize partnership and respect for Panamanian sovereignty while addressing growing Chinese influence in the region.