US vows to curb China’s sway over Panama Canal

During discussions with Panama’s President Jose Raul Mulino, both sides reaffirmed their security ties. However, their official statements diverged, with Panama’s version emphasising its sovereignty over the canal – a point omitted from the US version.

Hegseth claimed China neither built nor operates the canal and said it would not be used as a geopolitical weapon. He argued Chinese control over nearby infrastructure enabled potential espionage, undermining regional security. China dismissed these claims, insisting it respects Panama’s sovereignty and does not interfere. It accused the US of stoking fear to obstruct international cooperation.

Tensions have also escalated around Hong Kong-based CK Hutchison, which runs ports at both ends of the canal. Following US pressure and a local audit alleging contractual breaches, Panama accused the company of withholding $1.2 billion. A proposed sale of the ports to US firm BlackRock is now under Chinese antitrust review.

Hegseth's visit comes two months after US Secretary of State Marco Rubio’s trip. Shortly afterwards, Panama withdrew from China’s Belt and Road Initiative, signalling further distancing from Beijing’s influence.

Hegseth said the US and Panama would work together to safeguard the canal’s neutrality and security, calling it a global asset that must remain open to all nations.