US defense secretary warns of Chinese threat to Panama Canal

Speaking at a regional security conference, Hegseth emphasized that Chinese companies are gaining control over strategic assets and key infrastructure across vital economic sectors.

– The Chinese military is becoming overly active in the Western Hemisphere – said the Pentagon chief. – Beijing is investing and operating in this region to gain military advantage and unfair economic benefits.

He announced plans to sign a new security and operations agreement with Panama concerning the Panama Canal, which would grant U.S. Navy vessels priority passage and unimpeded navigation.

Hegseth also urged regional governments to work together in deterring Chinese influence and to tackle threats posed by transnational drug cartels and uncontrolled migration.

As reported by the Associated Press, the Trump administration had previously voiced dissatisfaction with the fact that, despite the U.S. treaty obligation to safeguard the canal, American warships were still required to pay tolls to transit between the Atlantic and Pacific Oceans. Ultimately, both countries agreed to strengthen security coordination and develop a reimbursement mechanism for tolls paid by U.S. naval vessels.

Panama, for its part, has previously denied claims of Chinese influence over canal operations.

Responding on the social platform X, the Chinese embassy in Panama criticized the U.S. statements, accusing Washington of coercion to further its own interests. It asserted that Panama’s decisions regarding trade partnerships are a matter of sovereign right. And not something the U.S. has any authority to interfere with.