US to counter Chinese influence over Panama Canal, defense chief declares

File Source: EuroNews

The United States is stepping up efforts to counter Chinese influence over the Panama Canal, with US Defense Secretary Pete Hegseth vowing to work with Panama to prevent Beijing from leveraging the strategic waterway for espionage purposes.

During a visit to Panama on Tuesday, Hegseth, speaking after talks with the Panamanian government, underscored Washington’s commitment to bolstering security cooperation with Panama’s forces. “Together, we will take back the Panama Canal from China’s influence,” Hegseth said at a pier renovated with US assistance. “China did not build this canal. China does not operate this canal and China will not weaponize this canal. Together with Panama in the lead, we will keep the canal secure and available for all nations.”

The Panama Canal, which handles over 40 percent of US container traffic, is vital to US trade, with goods valued at $270 billion annually passing through. Hegseth’s visit, the first by a US defense secretary in decades, comes amid ongoing US concerns over China’s growing commercial presence in Panama, including plans for Chinese firms to build a bridge across the canal.

While Hegseth echoed broader US concerns about Chinese espionage, the Pentagon chief sought to address local sensitivities, stressing Panama’s leadership in safeguarding the canal’s security. “The government of President Jose Raul Mulino understands the threat from China,” Hegseth said, acknowledging Panama’s recent decision to exit China’s Belt and Road Initiative.

The stakes are high for the US, with critics of former President Trump’s rhetoric questioning the diplomatic impact of his hardline stance on the canal. Despite Trump’s claims that China operates the waterway — a statement Hegseth refuted — experts acknowledge the strategic risks posed by Chinese commercial ventures, particularly regarding intelligence gathering.

Hegseth’s remarks follow a key deal in which US firm BlackRock acquired a substantial portion of the $22.8 billion ports business of Hong Kong’s CK Hutchison, a move hailed as a step toward reclaiming influence over the canal. However, China has criticized the transaction, and US officials are concerned about the potential security risks posed by China’s commercial footprint.

While Trump has suggested military action may be necessary, the current US administration emphasizes cooperation with Panama. Yet, some experts, like former US Ambassador John Feeley, caution against viewing Chinese presence in Panama as a treaty violation. “There hasn’t been a violation of the neutrality treaty,” Feeley said, referring to the 1977 agreement that handed control of the canal to Panama.

Despite these debates, Hegseth’s visit signals a renewed focus on safeguarding the canal as a critical global trade route and strategic asset.