In a bold strategic shift, U.S. Secretary of Defense Pete Hegseth announced that the United States will reestablish its presence and influence over the Panama Canal—one of the world’s most critical maritime trade routes—effectively ending what Washington views as growing Chinese involvement in the region.
The statement came during Secretary Hegseth’s rare and high-stakes visit to Panama, marking the first such trip by a U.S. defense chief in several decades.
While in Panama City, Secretary Hegseth held a high-level, closed-door meeting with Panamanian President Jose Raul Mulino.
The visit served as a pivotal diplomatic moment, coming amid rising U.S. concerns over China’s economic and strategic footprint in and around the canal, which connects the Atlantic and Pacific Oceans and handles roughly 5% of global maritime trade.
Hegseth toured key sections of the canal and later told reporters that China’s influence in the waterway—largely through commercial investments and strategic infrastructure deals—poses a security risk to global trade and American naval mobility.
He pledged that the U.S. and Panama would work in unison to push back against any efforts by Beijing to convert economic relationships into strategic advantages.
“China did not build the canal, does not operate the canal, and will not be allowed to weaponize it,” Hegseth declared firmly. “Together, we—Panama and the United States—will take back the Panama Canal from China’s influence and ensure it remains open, secure, and accessible to all nations.”
The defense secretary emphasized that the U.S. would increase military coordination and security partnerships with Panama to ensure that the canal could not be exploited for espionage or geopolitical leverage.
While Hegseth used diplomatic language, he made it clear that Washington views Chinese firms operating near the canal as a potential front for surveillance and influence operations.
This visit comes amid a broader recalibration of U.S. policy in the Western Hemisphere under President Donald Trump, whose administration has adopted a more confrontational stance against Chinese influence in Latin America.
While Trump has not ruled out the use of military force to secure U.S. interests in the canal, Hegseth’s message focused on cooperation and partnership—with Panama “in the lead,” signaling respect for Panamanian sovereignty and sensitivities around foreign control of the canal.
The announcement reflects a significant shift in the long-standing dynamic that began in 1999, when the United States formally handed over full control of the Panama Canal to the Panamanian government.
Now, after more than two decades, the U.S. appears poised to play a more active role in securing the waterway once again—though this time in partnership with Panama rather than unilateral oversight.
Strategic analysts say the timing of the visit and the rhetoric surrounding it are highly consequential. As tensions simmer globally—particularly with China in the Indo-Pacific—control and security of the Panama Canal are taking on renewed importance. U.S. military planners view the canal as a critical logistics corridor for rapid naval deployment between the Atlantic and Pacific in the event of a conflict.
“If war were to break out in Asia, the Panama Canal becomes vital to U.S. operations,” said one senior military official. “China’s current presence could offer them significant advantages in monitoring or slowing our movements, even if they cannot physically block naval passage.”
In recent months, Panama has signaled growing alignment with Washington’s geopolitical stance. In February, President Mulino formally announced Panama’s withdrawal from China’s Belt and Road Initiative, a sprawling global infrastructure and investment plan that has drawn sharp criticism from the West for increasing debt and strategic dependency in participating countries.
President Mulino has also worked closely with the Trump administration on border security and migration issues. He supported U.S. efforts to deport non-Panamanian migrants and helped stem the flow of illegal migration through Panama’s treacherous Darien jungle—an area increasingly used as a route for migrants heading north to the United States.
Further signaling the shift in strategic ties, last month saw U.S. investment giant BlackRock lead a multi-billion dollar acquisition of the global ports business of Hong Kong-based CK Hutchison.
The $22.8 billion deal included key port assets located at both ends of the Panama Canal. President Trump celebrated the acquisition as a move toward “reclaiming the Panama Canal” from Chinese corporate control.
The Chinese government, however, reacted angrily to the deal. Beijing’s market regulator announced an antitrust review, citing concerns about the implications for Chinese firms and trade access. China’s Foreign Ministry also criticized the United States for what it called “economic coercion” and interference in sovereign investment decisions.
Nonetheless, U.S. officials and strategic experts have welcomed Panama’s stance and President Mulino’s willingness to deepen cooperation.
They see the new alignment as a major diplomatic win for the Trump administration in its broader competition with China for global influence.
With the United States now signaling its intent to return to a more assertive role in the management and security of the Panama Canal, the geopolitical landscape in Central America is undergoing a notable transformation.
The coming months may bring further developments, especially as the U.S. begins implementing new security measures and deepening its military engagement with Panamanian forces.
In the eyes of Washington, the message is clear: the canal is too important—economically, militarily, and symbolically—to risk falling under the shadow of any foreign power.