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U.S. Defense Secretary Pete Hegseth is set to visit the Panama Canal on Tuesday, marking a rare visit to the Central American nation amid tensions surrounding President Donald Trump’s stance on reclaiming the canal, Reuters reported. Hegseth’s visit comes at a critical time as Panama is reportedly grappling with U.S. concerns over Chinese investments near the canal.
Reports suggest that the Trump administration has requested military options to ensure American access to the canal—an important waterway the US once controlled but handed over to Panama in 1999 after Trump suggested that China is “operating” the canal and that Chinese soldiers are present there.
“On the whole, this hasn’t been a winning issue for the US in terms of public diplomacy in Panama,” Ryan Berg, director of the Americas Program at the Center for Strategic and International Studies, told Reuters.
Meanwhile, experts have acknowledged the U.S. security concerns regarding China’s expanding commercial presence in Panama, the report said, adding that Chinese firms have planned to build a bridge over the canal, raising alarms about potential espionage risks.
Additionally, last month, Trump celebrated the purchase of most of the $22.8 billion ports business from Hong Kong’s CK Hutchison, an example of what he called the U.S. “reclaiming” the canal. However, China has since criticized the deal, with its market regulator announcing an antitrust review.
Former U.S. ambassador to Panama, John Feeley, dismissed the Trump administration’s claims that Chinese involvement in Panama violates the U.S.-Panama treaty. “What’s not legitimate about the way Trump has gone about this is the bullying tactic that he’s used, which is to claim that there has been a violation of the neutrality treaty. There hasn’t been,” Reuters quoted Feeley as saying.
Panama’s president, Jose Raul Mulino, has been a key U.S. ally in the region, with Mulino leading Panama’s exit from China’s Belt and Road Initiative and supporting U.S. immigration policies, including accepting deportation flights and efforts to curb migration through the Darien jungle.
Mulino has defended Panama’s administration of the canal, reportedly saying it has been responsibly managed for global trade, including trade with the U.S., and will remain under Panama’s control. “It is, and will continue to be, Panamanian,” he said, according to Reuters.
According to the report, the Panama Canal remains vital for U.S. shipping, with more than 40% of U.S. container traffic, valued at roughly $270 billion annually, passing through the canal. The waterway handles more than two-thirds of the vessels transiting the world’s second-busiest interoceanic waterway daily.
