IRIA News

5 minute read

U.S. Secretary of Defense Pete Hegseth declared on April 8, 2025, that the United States would “take back” the Panama Canal from Chinese influence. The statement came during a high-profile visit to Panama, where Hegseth held security talks with Panamanian officials and toured military sites.

Speaking at a U.S.-renovated pier in Panama City, Hegseth issued a blunt warning. “Together, we will take back the Panama Canal from China’s influence,” he said. “China did not build this canal. China does not operate this canal, and China will not weaponize this canal. Together with Panama in the lead, we will keep the canal secure and available for all nations.”

The remarks reflect growing concerns in Washington over China’s expanding economic footprint in Latin America, particularly in infrastructure and logistics sectors that intersect with global commerce and security.

The Panama Canal, built by the United States in the early 20th century and handed over to Panama in 1999, remains one of the world’s most critical maritime chokepoints. Over 40% of U.S. container traffic, worth an estimated $270 billion annually, passes through the canal, representing two-thirds of the daily vessels that transit its locks. Any disruption or manipulation of this channel, U.S. officials fear, could have profound consequences for the global economy and military logistics, especially in a conflict scenario involving the Indo-Pacific.

Hegseth’s language was noticeably sharp yet calculated. Unlike President Donald Trump, who has suggested the U.S. might forcibly “take back” the canal and called the 1999 handover a “bad deal,” Hegseth avoided overt military threats. Still, he left little doubt about America’s intentions to curb Chinese influence, warning against what he called Beijing’s efforts to “weaponize” commercial investments for intelligence purposes.

China did not build this canal.

China does not operate this canal.

and China will not weaponize this canal.

Together, we will take back the canal from China’s influence. pic.twitter.com/CiFCOJJFw6

— Pete Hegseth (@PeteHegseth) April 8, 2025

“In reality or perception, the communist Chinese have had designs on more control of this canal, and to that we say: Not on our watch,” Hegseth said during a joint engagement with U.S. troops and Panamanian forces. He further underscored the importance of the canal as “key terrain,” hinting at expanded U.S. military presence and more frequent joint exercises, including the possible revitalization of a jungle survival training center.

According to the Department of Defense statement, the U.S. and Panamanian officials agreed that the need to address shared security challenges and recognized “The robust foundation and legacy of bilateral security cooperation, including over $230 million in U.S. Department of Defense and Department of State security assistance to Panama in the past five years”.

President Mulino, Administrator Vazquez, and Secretary Hegseth committed their joint resolve to strengthen bilateral Canal security cooperation and enhance bilateral training and exercises in Panama.

The statement highlighted that the U.S. is committed to strengthening Panama’s security capabilities through a Memorandum of Understanding that will enable increased bilateral activities between the U.S. military and Panamanian security forces and support mission needs at joint-use locations.

China’s influence on the Panama Canal

While Hegseth’s remarks were directed at Chinese commercial activities, Trump’s previous assertions went further, including unsubstantiated claims that Chinese soldiers were present in Panama and that China operated the canal, allegations even Hegseth refuted. Nonetheless, Washington’s strategic anxieties are not unfounded.

Chinese firms currently hold significant commercial interests in Panama, including the construction of a bridge over the canal and the management of major ports at both ends. One such firm, Hong Kong-based CK Hutchison, is in the process of selling its $22.8 billion port business to a consortium led by U.S. investment giant BlackRock, a move Trump has hailed as an example of “reclaiming” the canal through economic means.

US-Panama relations

Panama’s President Jose Raul Mulino, who met with Hegseth during the visit, has proven to be a key partner in Washington’s regional strategy. In February, he announced Panama’s withdrawal from China’s Belt and Road Initiative, signaling a pivot toward the U.S. Mulino has also supported U.S. migration policies, accepted deportation flights, and worked to limit illegal crossings through the dangerous Darien Gap.

The joint statement released following Hegseth’s visit emphasized both countries’ commitment to strengthening bilateral security cooperation. This includes a renewed focus on canal defense, intelligence sharing, professional military training, and cyber cooperation between the U.S. Southern Command and the Panama Canal Authority.

The agreement also reaffirmed the expedited transit rights for U.S. and Panamanian military vessels, in line with treaty obligations, and outlined plans to compensate Panama under the Neutrality framework for tolls and charges.

“The canal is, and will continue to be, Panamanian,” Mulino said, defending his country’s stewardship of the canal in the face of growing U.S. pressure and Chinese criticism. Administrator of the Panama Canal Authority, Ricaurte Vásquez, joined in reiterating the canal’s neutrality and importance to global trade, while supporting the bolstered security relationship.

China’s reaction

China, for its part, issued a strong rebuttal. In a statement, the Chinese Embassy in Panama accused the U.S. of conducting a “sensationalistic campaign” based on a “theoretical Chinese threat.”

It noted that China had never operated or militarized the canal and questioned who had historically disrupted the canal’s neutrality, referencing the U.S. invasion of Panama in 1989. “Who is truly safeguarding the canal’s neutrality and prosperity? Who keeps clamoring to ‘take back’ the canal? Who is the real threat to it?” the statement asked.

Despite Chinese pushback, Hegseth’s visit appears to have laid the groundwork for a deeper U.S.-Panama alliance aimed at counterbalancing China’s regional clout. As the U.S. military reengages in the region and plans joint operations for canal security, the longstanding legacy of American strategic dominance in Panama is being reasserted, not by reclaiming sovereignty, but by reinforcing partnerships.