In a recent development, U.S. Defense Secretary Pete Hegseth emphasized the importance of safeguarding the Panama Canal amid perceived threats from China. During his visit to Panama City on Tuesday, Hegseth reiterated the United States’ commitment to working closely with Panama to ensure the security of the vital waterway.
Hegseth, while attending the inauguration of a new U.S.-funded dock at the Vasco Nuñez de Balboa Naval Base, assured Panama President José Raúl Mulino of the United States’ unwavering support. He emphasized that neither China nor any other nation would be permitted to jeopardize the canal’s operations, signaling a reinforcement of defense and security collaboration unprecedented in recent decades.
A particular concern raised by Hegseth pertained to the control of ports at both ends of the canal by a Hong Kong-based consortium, CK Hutchison Holdings, which is transitioning its controlling stake to an American-affiliated group including BlackRock Inc. According to Hegseth, the strategic positioning of Chinese-affiliated businesses in Panama could potentially lead to surveillance activities, thereby affecting the sovereignty and security of both Panama and the United States.
Following an extensive meeting with President Mulino, Hegseth and Mulino issued a joint statement. Although the statement hinted at discussions concerning toll payments incurred by U.S. ships crossing the canal, specific details were not elaborated upon. Significantly, the Spanish version of the statement recognized Panama’s sovereign authority over the canal, a recognition missing from the English version.
The visit comes amidst heightened scrutiny over the influence exerted by China over canal operations, claims firmly refuted by Panama. President Donald Trump’s repeated claims of alleged overcharging practices by Panama and China’s grip over canal operations have been a point of contention.
In an assertive response, the Chinese Embassy in Panama condemned the U.S. stance, asserting that Panama’s business dealings remain a sovereign decision beyond U.S. interference. The Chinese government accused the U.S. of employing scare tactics aimed at undermining Sino-Panamanian partnerships for its geopolitical advantage.
The current discourse follows previous tensions where the United States and Panama allegedly reached an agreement regarding toll exemptions for U.S. military vessels. Despite public rebuttals from Mulino, the issue remains a point of diplomatic interaction.
Complications arose due to the Hong Kong consortium’s 25-year lease on vital canal ports, a lease which the Panamanian government found irregular upon audit. The recent decision by CK Hutchison to sell its stake to a consortium, including BlackRock, pivots control towards the United States, leading to significant geopolitical shifts in canal governance.
In further discussions with Marco Rubio, Secretary of State, a purported treaty violation by China’s presence in the canal was broached, hearkening back to the 1999 U.S.-Panama treaty ensuring canal neutrality. Mulino has consistently refuted narratives suggesting Chinese operational influence over the canal, highlighting his intent to focus on mutually beneficial discussions.
Hegseth underscored the U.S.’s historical role in the canal’s creation, stating unequivocally that China would neither operate nor militarize the canal under the joint stewardship of Panama and the United States. He reassured all nations of the canal’s security, reinforced by the U.S.’s formidable military strength, reaffirming a collaborative effort to keep the canal accessible.