Panama, US lock in new security pact for Canal as China tensions simmer

The United States and Panama have officially signed a new defense and security pact aimed at reinforcing control over the Panama Canal, a move that Defense Secretary Pete Hegseth claims is critical to pushing back against China’s growing grip in the region.

In a press release posted Wednesday night on the Panama Canal Authority’s website, it was confirmed that Panama’s Minister for Canal Affairs and Hegseth signed a joint declaration that reaffirms Panamanian sovereignty and outlines new military cooperation. The deal reaffirms respect for, and the recognition of, Panamanian sovereignty over the interoceanic waterway, upholding both nations’ commitment to the Neutrality Treaty and the legal framework that governs canal operations.

But the declaration goes beyond words. It lays out plans for a cost-sharing model to cover services provided to U.S. warships and auxiliary vessels, with the goal of keeping it cost-neutral. Efforts will be made to develop a mechanism which will allow compensation for services provided to warships and auxiliary vessels, seeking a cost-neutral basis. This mechanism will be evaluated jointly with the Ministry of Security of Panama.

According to Hegseth, a broader framework is also in the works, one that would guarantee U.S. warships “first and free” passage through the Panama Canal. A memorandum of understanding has already been signed, and a final document is on the way to formally secure toll-free priority for American naval vessels.

While the U.S. builds up its military coordination, the Panama Canal Authority confirmed that collaboration already includes engineering, security, and cybersecurity, key focus areas for both governments as they push back against foreign interference. This move comes as the U.S. prepares to deploy the USNS Comfort, a Navy hospital ship, to the region in a show of presence and partnership.

Hegseth visited U.S. troops, met with Panamanian officials, and toured the canal earlier this week. He warned sharply that China’s reach in the Western Hemisphere is already too big, and still growing. “Make no mistake, Beijing is investing and operating in this region for military advantage and unfair economic gain,” he said.

Hegseth stressed that war is not the objective but rather preventing war by deterring China’s threats in the hemisphere. He also made clear that the U.S. is taking steps to counter Chinese-controlled infrastructure in Panama. “The United States will not allow China to threaten the canal’s operation,” he added.

Despite the growing military and political coordination, Panamanian President José Raúl Mulino has publicly denied that China controls the canal. “I completely reject that statement,” Mulino said, pushing back on earlier claims from the U.S. State Department that a deal had already been reached guaranteeing toll-free passage for U.S. warships. The Canal Authority added that it has not made any adjustments to its fee structure.

In conclusion, the United States and Panama are strengthening their defense and security cooperation to ensure the sovereignty and security of the Panama Canal amidst growing Chinese influence in the region. The partnership aims to maintain the neutrality and operational integrity of the canal while deterring any threats that may compromise its operation.