The United States and Panama have officially signed a new defense and security pact aimed at reinforcing control over the Panama Canal. This strategic move, as Defense Secretary Pete Hegseth claims, is critical for countering China’s growing influence in the region.
In a press release posted Wednesday night on X, the Panama Canal Authority confirmed that Panama’s Minister for Canal Affairs and Hegseth signed a joint declaration that reaffirms Panamanian sovereignty and outlines new military cooperation.
The agreement “reaffirms respect for, and the recognition of, Panamanian sovereignty over the interoceanic waterway,” stated the Canal Authority.
It also upholds both nations’ commitment to the Neutrality Treaty and the legal framework that governs canal operations, including Panama’s Constitution, the treaty itself, and the Canal’s Organic Law.
HEGSETH SAYS PANAMA AGREED TO ALLOW US WARSHIPS TO TRAVEL ‘FIRST AND FREE’ THROUGH CANAL
However, the declaration is not just rhetorical. It lays out plans for a cost-sharing model to cover services provided to U.S. warships and auxiliary vessels, aiming for a “cost-neutral” approach.
“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,” the statement reads. “This mechanism will be evaluated jointly with the Ministry of Security of Panama.”
According to Hegseth, a broader framework is on the horizon, which would guarantee U.S. warships “first and free” passage through the Panama Canal.
Hegseth announced that U.S. and Panamanian officials had already signed a memorandum of understanding, with a final document forthcoming to formally secure toll-free priority for American naval vessels.
The Canal Authority emphasized that this agreement is merely the beginning. “The declaration constitutes a first step in establishing this model, which will be developed in later stages.”
US, PANAMA ‘TAKING BACK’ CANAL FROM ‘CHINA’S INFLUENCE,’ SAYS HEGSETH
As the U.S. enhances its military coordination, the Panama Canal Authority confirmed that collaboration already encompasses “engineering, security, and cybersecurity,” which are key focus areas for both governments in their efforts to counter foreign interference.
This development coincides with the U.S. preparing to deploy the USNS Comfort, a Navy hospital ship, to the region as a show of presence and partnership.
Earlier this week, Hegseth visited U.S. troops, met with Panamanian officials, and toured the canal. He warned that China’s influence in the Western Hemisphere is already extensive and continues to grow.
“Make no mistake, Beijing is investing and operating in this region for military advantage and unfair economic gain,” Hegseth stated. “They operate military facilities and ground stations that extend their reach into space. They exploit natural resources and land to fuel China’s global military ambitions. China’s factory fishing fleets are depleting resources from our nations and our people.”
Hegseth asserted that war is not the goal. “Together, we must prevent war by robustly and vigorously deterring China’s threats in this hemisphere,” he added.
He also clarified that the U.S. is taking proactive steps to address Chinese-controlled infrastructure in Panama.
“China-based companies continue to control critical infrastructure in the canal area,” Hegseth remarked. “This gives China the capacity to conduct surveillance activities across Panama, making both Panama and the United States less secure and less sovereign. As President Donald Trump has indicated, this situation is unacceptable.”
Hegseth was forthright: “The United States will not allow China to threaten the canal’s operation.” He emphasized, “To this end, the United States and Panama have strengthened our defense and security cooperation more in recent weeks than we have in decades.”
Despite the increasing military and political coordination, Panamanian President José Raúl Mulino has publicly rejected claims that China controls the canal.
“I completely reject that statement,” Mulino asserted, countering earlier statements from the U.S. State Department about a deal already being in place for toll-free passage of U.S. warships. The Canal Authority further stated that it has “not made any adjustments” to its fee structure.
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Hegseth did not immediately respond to Fox News Digital’s request for comment.
