US Defense Secretary Pete Hegseth Highlights China's Threat to Panama Canal Security

US Secretary of Defense Pete Hegseth expressed concerns about China's influence over the Panama Canal, emphasising that the US and Panama will work together to ensure its security. During a ceremony at the Vasco Nuñez de Balboa Naval Base, Hegseth stated that the US would not allow any nation, including China, to threaten the canal's operations.

Hegseth highlighted that recent efforts have significantly strengthened US-Panama defence cooperation. He noted that ports at both ends of the canal are managed by a Hong Kong consortium, which is selling its stake to another group involving BlackRock Inc. "China-based companies continue to control critical infrastructure in the canal area," Hegseth said. "That gives China the potential to conduct surveillance activities across Panama. This makes Panama and the United States less secure, less prosperous and less sovereign."

Security Concerns Over Canal Operations

Hegseth's visit comes amid tensions over US President Donald Trump's claims that the US is being overcharged for canal usage and that China has undue influence over its operations. Panama has refuted these allegations. After a phone conversation between Hegseth and Panama President José Raúl Mulino in February, the US State Department announced an agreement exempting US warships from canal fees, which Mulino publicly denied.

The Hong Kong consortium's 25-year lease on ports at either end of the canal has raised concerns. The Panamanian government audited this lease and found irregularities. However, CK Hutchison has already announced plans to sell its controlling stake to a consortium including BlackRock Inc., potentially shifting control to American interests.

Historical Context and Future Implications

The United States constructed the canal in the early 20th century to facilitate maritime transit between its coasts. Control was transferred to Panama on December 31, 1999, under a treaty signed by President Jimmy Carter in 1977. Trump suggested that China's presence might violate this treaty, which mandates permanent neutrality for the canal.

Mulino has consistently denied any Chinese influence over canal operations and expressed frustration with ongoing narratives suggesting otherwise. "We aren't going to speak about what is not reality, but rather those issues that interest both countries," he stated in February.

During his visit, Hegseth reiterated that China neither built nor operates the canal and assured that it would not be weaponised. "Together with Panama in the lead, we will keep the canal secure and available for all nations through the deterrent power of the strongest, most effective and most lethal fighting force in the world," he affirmed.

Hegseth also shared a photo on X with Mulino, expressing honour in their discussions. "You and your country's hard work is making a difference," he wrote. "Increased security cooperation will make both our nations safer, stronger and more prosperous."