The United States and Panama have taken significant steps to strengthen their relationship, particularly regarding the Panama Canal. On April 9, 2025, U.S. Secretary of Defense Pete Hegseth and Panama’s Minister for Canal Affairs signed a new defense and security agreement. This pact aims to reinforce Panama’s control over the canal and reduce Chinese influence in the region.
Hegseth highlighted the importance of this agreement in a press release, stating that it is crucial for pushing back against China’s growing presence in Latin America. The Panama Canal Authority confirmed the signing of this joint declaration, which reaffirms Panama’s sovereignty over the canal and outlines plans for military cooperation between the two nations.
The agreement emphasizes mutual respect for Panama’s sovereignty and upholds the Neutrality Treaty that governs canal operations. It also includes a cost-sharing model for services provided to U.S. warships, aiming to keep these arrangements cost-neutral.
Hegseth announced that a broader framework is in development, which would ensure U.S. naval vessels receive priority passage through the canal without tolls. This memorandum of understanding is seen as the first step in a larger plan to secure U.S. interests in the region.
The collaboration between the U.S. and Panama extends beyond military operations. The Panama Canal Authority noted that the agreement includes areas such as engineering and cybersecurity, crucial for countering foreign interference.
This move comes as the U.S. prepares to deploy the USNS Comfort, a Navy hospital ship, to the region, showcasing its commitment to partnership. Hegseth’s visit to Panama included meetings with local officials and a tour of the canal, where he warned about China’s expanding influence.
Hegseth expressed concern over Chinese companies controlling vital infrastructure in the canal area. He stated that this situation poses security risks for both Panama and the United States, emphasizing that the U.S. will not allow China to threaten the canal’s operations.
Despite the growing military and political ties, Panamanian President José Raúl Mulino has publicly denied claims that China controls the canal. He rejected assertions from U.S. officials regarding a deal for toll-free passage for U.S. warships, stating that the Canal Authority has not changed its fee structure.
Overall, this agreement marks a pivotal moment in U.S.-Panama relations, aiming to bolster security and reduce foreign influence in a strategically important area.