On April 8, 2025, U.S. Defense Secretary Pete Hegseth delivered a bold message during a visit to Panama, asserting that the United States would not allow China or any other nation to threaten the operation of the Panama Canal. Speaking at the inauguration of a U.S.-funded dock at the Vasco Núñez de Balboa Naval Base, Hegseth underscored the strategic importance of the canal, a vital artery for global trade, and raised alarms about China’s influence in the region. His remarks, made after a two-hour meeting with Panamanian President José Raúl Mulino, come amid escalating tensions fueled by President Donald Trump’s claims that China exerts undue control over the canal’s operations, a charge Panama firmly denies.
The Panama Canal, through which 5% of global maritime trade flows, has long been a geopolitical flashpoint. Built by the United States in 1914 and transferred to Panama in 1999 under the Carter-Torrijos Treaties, the canal remains a symbol of national sovereignty for Panama. Hegseth’s visit, part of a broader U.S. strategy to counter China’s growing presence in Latin America, highlighted concerns over Chinese companies, particularly Hong Kong-based CK Hutchison Holdings, which operates ports at Balboa and Cristóbal. Hegseth claimed these operations enable China to conduct surveillance, threatening the security and sovereignty of both Panama and the U.S. He echoed Trump’s sentiment that this situation is “unacceptable,” emphasizing that “China did not build this canal, does not operate it, and will not weaponize it.”
Hegseth’s statements were not without controversy. China’s embassy in Panama swiftly responded, calling the accusations “unfounded” and referencing the 1989 U.S. invasion of Panama as the only historical instance of the canal’s operation being disrupted. The embassy stressed that China respects Panama’s sovereignty and has never interfered in the canal’s management, which is handled by the autonomous Panama Canal Authority. This sharp rebuttal underscores the broader U.S.-China rivalry, with the canal becoming a focal point in a global trade war intensified by Trump’s recent tariffs on Chinese goods.
The U.S. has taken concrete steps to bolster its presence in the region. Hegseth announced that a U.S. Coast Guard vessel would transit the canal for anti-narcotics operations in the Eastern Pacific, alongside joint military exercises with Panamanian forces. These actions, part of the Central American Security Conference co-hosted by the U.S. and Panama, signal a renewed commitment to defense cooperation. Hegseth praised Mulino’s decision to withdraw from China’s Belt and Road Initiative, a move seen as a strategic win for Washington. He also highlighted a $5 million U.S. Army Corps of Engineers investment to restore the dock, enhancing maritime security.
However, the visit was not universally welcomed. In Panama City, approximately 200 protesters, mobilized by leftist groups and unions, burned American flags and displayed signs reading, “Trump, keep your hands off Panama.” They view U.S. rhetoric as a threat to Panama’s sovereignty, especially given Trump’s suggestion that the U.S. might seek to reclaim the canal. Panama’s government, led by Mulino, has repeatedly affirmed that the canal “is and will remain Panamanian,” dismissing claims of Chinese control.
Adding to the tension, a recent Panamanian audit revealed irregularities in CK Hutchison’s port operations, alleging that Panama was shortchanged $1.2 billion. This coincided with the stalled sale of these ports to a U.S.-led consortium including BlackRock, delayed by a Chinese antitrust probe. Trump hailed the potential sale as a victory, though Panama insists it is unrelated to geopolitical pressures.
Hegseth’s visit marks a pivotal moment in U.S.-Panama relations, with the canal at the heart of a high-stakes geopolitical chess game. As both nations deepen their security ties, the specter of Chinese influence looms large, fueling a narrative of competition that shows no signs of abating. The canal’s future, caught between national pride and global power plays, remains uncertain, with its security hanging in the balance.
