In a recent visit to Panama City, the U.S. Secretary of Defense shifted attention back to rising Chinese influence in the Western Hemisphere, specifically spotlighting concerns over the Panama Canal. The official highlighted that corporations originating from China are controlling key land areas and infrastructure in pivotal sectors.
“The presence of China’s military in the Western Hemisphere is too substantial,” he remarked at a security conference. He suggested that China seeks to gain military and economic leverage in the region. Furthermore, he encouraged regional governments to collaborate in countering these growing influences and tackle other pressing threats like transnational drug cartels and large-scale immigration.
This event follows the Secretary’s meeting with Panama’s President, where they discussed bilateral security coordination and issues regarding transit fees for U.S. warships passing through the canal. The meeting came amid tensions fueled by previous claims from U.S. President Donald Trump, asserting that the U.S. was being overcharged for canal transit and that China wielded undue influence over its management. Panama has refuted these claims.
In response to the meeting, the Chinese Embassy in Panama issued a statement on a social media platform, accusing the U.S. of coercion and asserting that Panama’s business decisions are within its sovereign rights, beyond U.S. influence. Meanwhile, the Secretary distanced himself from the idea of blackmail.
The concerns over Chinese influence have been accentuated by a Hong Kong-based consortium, CK Hutchison, which holds a long-term lease on key ports at the canal’s entrances. Recent audits by the Panamanian government revealed inconsistencies in the lease agreement, although CK Hutchison has denied these allegations. The company has declared its intention to sell its controlling shares in the ports to an investment group led by BlackRock Inc., which would shift control effectively to American entities.
On further engagements, the Secretary planned to sign a new accord with Panama aimed at securing the Panama Canal’s operation, ensuring that U.S. warships can transit freely, without charge. This aligns with previous criticisms of the Trump administration regarding treaty obligations and transit costs.
Panama’s Canal Affairs Minister stated that they are seeking a system to reimburse the transit fees paid by U.S. warships. Historically, annual fees have ranged from $5 million to $7 million, while the canal generated approximately $2.4 billion for Panama in the last fiscal year.