Pentagon chief announces renewed security partnership with Panama as Washington pushes back against Beijing’s expanding regional influence

During a high-profile visit to Panama on 8 April, US Defence Secretary Pete Hegseth declared that the United States intends to diminish Chinese influence over the Panama Canal, reaffirming Washington’s strategic interest in securing this vital international waterway.

Speaking from a US-funded infrastructure site in Panama City, Hegseth said China must not be allowed to exploit commercial engagements for intelligence purposes, promising deeper cooperation between American and Panamanian security forces. “China neither constructed nor controls the canal – and it will not be allowed to militarise it,” he stated. “With Panama taking the lead, we will ensure the canal remains safe and accessible to all nations.”

The canal is critical to global trade, particularly for the US, which sees over 40 per cent of its container shipping – valued at more than US$270 billion annually – transit through the waterway.

China, however, rejected Hegseth’s allegations. Its embassy in Panama dismissed the remarks as unfounded, accusing the US of using the so-called ‘China threat’ to justify interference. “China has not participated in the canal’s management nor interfered in Panama’s internal affairs,” the statement read, warning against Washington’s use of coercive tactics.

Hegseth’s visit, the first by a US defence secretary to Panama in decades, comes amid rising tensions. Former President Donald Trump has repeatedly criticised the 1999 handover of the canal to Panama and hinted at potential military options. Hegseth’s remarks were viewed as a less aggressive but strategically aligned stance, highlighting security partnerships rather than direct intervention.

The defence secretary held closed-door meetings with Panamanian President Jose Raul Mulino, who has distanced his country from China in recent months. In February, Panama formally exited Beijing’s Belt and Road Initiative, signalling a pivot back toward closer US relations. Mulino has also supported US efforts on regional migration, including accepting deportation flights and tightening border controls in the Darien Gap.

Hegseth praised Panama’s leadership in recognising threats posed by China’s growing commercial footprint, which includes plans for infrastructure near the canal. The Trump administration recently backed a major US-led acquisition of port assets formerly owned by a Hong Kong-based firm, calling it a step toward “reclaiming” strategic assets in the region.

Security analysts acknowledge the canal’s military significance. In the event of conflict in the Asia-Pacific, the US Navy would rely on the canal to shift vessels between oceans. Even without direct control, Beijing could exploit its commercial presence for surveillance.

Despite these concerns, former US ambassador to Panama John Feeley criticised Washington’s approach, saying claims of treaty violations were exaggerated. “The canal’s neutrality has not been compromised. What’s problematic is the aggressive rhetoric,” he remarked.

President Mulino reaffirmed Panama’s sovereignty and commitment to managing the canal responsibly, assuring partners that it “remains, and will continue to be, Panamanian”.