Panama announced that the United States recognized its sovereignty over the Panama Canal, despite recent tough rhetoric from Washington.

This announcement came as the two nations agreed to deepen US military training in Panama. US Defense Secretary, Pete Hegseth publicly acknowledged Panamanian sovereignty during his visit, the first by a Pentagon chief to Panama in decades. 

The Panama Canal is crucial for US container traffic, with over 40% of US goods, valued at approximately US$270 billion annually, passing through it. This accounts for more than two-thirds of daily vessel traffic through the world’s second-busiest interoceanic waterway.

Hegseth’s visit followed reports that the Trump administration had requested military options to ensure access to the canal, which the US built over a century ago and handed over to Panama in 1999. Trump has criticized the handover as a bad deal for the US.

Strategic importance of the canal

Hegseth emphasized the strategic importance of the canal, stating that Panama and the U.S. would secure it together, excluding China. “We are helping to reclaim the Panama Canal from communist Chinese influence,” Hegseth declared at a press briefing in Panama City.

While Hegseth focused on collaborating with Panama to counter Chinese influence, Trump has spoken more broadly, not ruling out military force. A US defence official, speaking anonymously to Reuters, acknowledged Panama’s sensitivities regarding its sovereignty.

According to the official, “Any perceived infringement on their sovereignty, whether by the US or China, is highly problematic.” The Panamanian government has firmly rejected US President Donald Trump’s claims that China controls the canal. 

However, current and former US officials and experts express legitimate security concerns about China’s presence in Panama, including potential military espionage through Chinese-owned ports and infrastructure. During Hegseth’s visit, the US and Panama issued joint statements on enhancing security cooperation. 

Notably, the Pentagon’s English-language version omitted a sentence from Panama’s Spanish-language version, which affirmed Panama’s sovereignty over the canal. The omitted sentence read: “Secretary Hegseth recognized Panama’s leadership and inalienable sovereignty over the Panama Canal and its adjacent areas.”

No permanent US military bases in Panama

Before departing for Washington, Hegseth reiterated respect for Panamanian sovereignty and the canal, expressing gratitude for Panama’s invitation to US troops for rotational, joint exercises.

Panama’s Minister for Public Security, Frank Abrego, clarified that Panama would not permit permanent military bases. “Secretary Hegseth, in our private meeting, acknowledged Panama’s sovereignty over the Panama Canal,” Abrego told reporters.

Current and former US officials and experts note that the US has found a willing partner in Panama’s President Jose Raul Mulino, who met with Hegseth on Tuesday. In February, Mulino announced Panama’s exit from China’s Belt and Road Initiative and supported Trump’s migrant crackdown. Hegseth praised Mulino’s government for understanding the threat from China. “We are deeply grateful for the friendship of our Panamanian counterparts, your partnership, and your leadership here in Panama and across the region,” Hegseth said.