During a landmark visit to Panama, U.S. Defense Secretary Pete Hegseth declared a firm stance against what he described as increasing Chinese influence over the Panama Canal. Speaking alongside Panamanian officials, Hegseth emphasized a renewed commitment to bolstering security cooperation with Panama and ensuring the canal remains free from foreign manipulation, particularly from China.

“Together, we will take back the Panama Canal from China’s influence,” Hegseth stated while visiting a pier in Panama City that had been renovated with U.S. support. He made it clear that China neither built nor operated the canal and that the United States, in partnership with Panama, would ensure it was not exploited for geopolitical leverage.

Canal’s Strategic Importance and U.S. Concerns

The Panama Canal is a vital trade route for the United States, with over 40% of U.S. container traffic—valued at approximately $270 billion annually—passing through its waters. This amounts to more than two-thirds of the vessels transiting the canal daily, underlining its crucial role in global commerce and U.S. national security.

Hegseth’s visit included a helicopter flyover of the canal and a tour of the iconic Miraflores lock, where he was seen waving to sailors aboard passing container ships. The visit marks the first time in decades a U.S. defense secretary has visited the country, highlighting the strategic emphasis the Biden administration is placing on Panama.

Despite acknowledging that China does not control or operate the canal, Hegseth expressed concerns over China’s commercial footprint in Panama, which includes construction projects and potential surveillance risks. His rhetoric was more measured compared to former President Donald Trump’s, who has not ruled out the use of military force and has publicly criticized the 1999 U.S. handover of the canal to Panama.

Panama’s Role and Rejection of the Belt and Road Initiative

Hegseth met with Panamanian President Jose Raul Mulino, who has emerged as a key partner in countering Chinese influence in the region. In February, Mulino announced Panama’s formal withdrawal from China’s Belt and Road Initiative—a global infrastructure strategy that critics argue expands Beijing’s political and economic influence.

Mulino has also aligned with the Trump administration on other policy fronts, including migration control. His government has cooperated with the U.S. on deportation flights for non-Panamanian migrants and efforts to manage the flow of people through the treacherous Darien Gap from South America.

Hegseth commended Mulino for his stance, stating that Panama would remain in the lead on maintaining the security and neutrality of the canal, but with strong U.S. support.

Commercial and Security Tensions with China

Though the Chinese Embassy in Panama has denied any interference in the canal’s operations, the U.S. remains wary of China’s commercial projects in the region. Among them is a proposed Chinese-funded bridge over the canal. U.S. officials argue that while these are technically private business dealings, they could be used for surveillance or other strategic purposes.

Hegseth framed the U.S. presence as protective rather than invasive, contrasting past military control with a collaborative security partnership. He even raised the possibility of revitalizing military cooperation, including reactivating a jungle warfare training center once used by U.S. forces.

Strategic and Diplomatic Ramifications

Trump has repeatedly stated that the United States made a mistake in handing over the canal, and his administration has explored military options to guarantee continued access in case of future conflict, especially with China. The canal would be critical for U.S. naval operations, enabling swift movement between the Atlantic and Pacific Oceans.

Despite these concerns, experts like former U.S. Ambassador to Panama John Feeley caution against exaggerating the threat. He criticized Trump’s rhetoric as misleading and unnecessarily provocative, asserting there has been no breach of the U.S.-Panama neutrality treaty.

Panama, for its part, has defended its stewardship of the canal, with President Mulino affirming that it continues to serve global trade interests responsibly, including those of the United States. “The canal is, and will continue to be, Panamanian,” Mulino declared.