U.S. Secretary of Defense Pete Hegseth is taking a firm stance against China’s growing influence over the Panama Canal, vowing that the United States will secure the vital waterway and explicitly not ruling out the use of military force to do so. In a speech delivered on April 8, 2025, at the U.S. Southern Command (SOUTHCOM) headquarters in Doral, Florida, Hegseth declares, “China did not build this canal, China does not operate this canal, and China will not weaponize this canal.” He emphasizes that the U.S. will “take back the canal from China’s influence,” citing national security concerns over Chinese companies’ foothold in the region, which he says raises the risk of espionage and economic coercion. The Panama Canal, a critical artery for global trade, handles 5% of the world’s maritime commerce, and Hegseth’s remarks signal a potential escalation in U.S.-China tensions as the Biden administration navigates an already strained relationship with Beijing.
Hegseth’s speech comes amid heightened scrutiny of China’s role in Panama, particularly through companies like CK Hutchison Holdings, a Hong Kong-based conglomerate that operates ports on both ends of the canal through its subsidiary, Hutchison Ports PPC. The Defense Secretary highlights that Chinese firms hold a “critical foothold” in the canal’s operations, managing key infrastructure such as the ports of Balboa and Cristobal, which handle 70% of the canal’s container traffic. He warns that this presence poses a “real and growing threat” to U.S. national security, accusing China of seeking “military advantage and unfair economic gain” in the Western Hemisphere. “We must prevent war by robustly and vigorously deterring China’s threats in this hemisphere,” Hegseth asserts, adding that the U.S. will work with Panama to ensure the canal remains free from Beijing’s control.
The Panama Canal has been a linchpin of U.S. strategic interests since its completion in 1914, when the U.S. controlled the waterway under the Hay-Bunau-Varilla Treaty. The canal was handed over to Panama in 1999 under the Torrijos-Carter Treaties, signed in 1977, which guaranteed Panama’s sovereignty over the canal while ensuring its neutrality and open access to all nations. However, the U.S. has maintained a vested interest in the canal’s security, given its role in facilitating $270 billion in annual trade, including 40% of U.S. container traffic and 70% of all goods moving between the U.S. East Coast and Asia. Hegseth’s comments reflect growing concerns in Washington about China’s global infrastructure ambitions, particularly through its Belt and Road Initiative, which has seen Beijing invest heavily in Latin America, including a $1.4 billion bridge project in Panama and a $3 billion deep-water port in Peru’s Chancay, set to open in November 2025.
Hegseth’s rhetoric is not without precedent. During his confirmation hearings in January 2025, he pledged to counter China’s influence in Latin America, a region he described as “America’s backyard.” His appointment as Defense Secretary under President Donald Trump, who returned to office in January 2025, has been marked by a hawkish stance on China, aligning with Trump’s broader trade and security policies. On April 8, 2025, just hours before Hegseth’s speech, Trump announced a 90-day pause on most tariffs, lowering them to 10%, while raising tariffs on Chinese imports to 125%, citing China’s retaliatory 84% tariffs on U.S. goods. This escalation has fueled fears of a broader trade war, with analysts like Peter Andersen of Andersen Capital Management calling it a “game of chicken” between the two superpowers.
China’s involvement in Panama dates back to 1997, when Hutchison Whampoa, a predecessor to CK Hutchison, won a 25-year concession to operate the ports of Balboa and Cristobal, a deal that was renewed in 2022 for another 25 years despite U.S. objections. At the time, U.S. officials, including then-Senator Jeff Sessions, raised alarms about potential Chinese espionage, though Panama dismissed the concerns, citing its neutral stance under the 1977 treaties. More recently, in 2018, Panama became the first Latin American country to join China’s Belt and Road Initiative, signing 19 cooperation agreements with Beijing by 2023. These agreements have included infrastructure projects like the $4.1 billion Panama-David high-speed rail, though the project stalled in 2024 amid funding disputes. China’s ambassador to Panama, Wei Qiang, has defended Beijing’s role, stating on April 7, 2025, that Chinese investments are “purely economic” and aimed at fostering “mutual prosperity,” not military dominance.
Hegseth, however, is unconvinced. He points to China’s broader pattern of behavior, including its militarization of the South China Sea and its control of critical infrastructure in other regions, such as the Port of Piraeus in Greece and the Hambantota Port in Sri Lanka, the latter of which was leased to China for 99 years after Sri Lanka defaulted on Chinese loans. “The Chinese Communist Party has a playbook,” Hegseth says, accusing Beijing of using economic leverage to gain strategic control. He also references a 2023 U.S. intelligence report that warned of China’s potential to use its port operations in Panama for intelligence gathering, including monitoring U.S. naval movements, given the canal’s proximity to SOUTHCOM’s headquarters, just 1,200 miles away.
Panama’s government has responded cautiously. On April 8, 2025, President José Raúl Mulino reaffirms Panama’s commitment to the canal’s neutrality, stating, “The Panama Canal is a global asset, not a pawn in great power competition.” Mulino, who took office in July 2024, has sought to balance relations with both the U.S. and China, noting that Chinese investments have created 5,000 jobs in Panama since 2018. However, he acknowledges U.S. concerns, announcing on April 9 that Panama will conduct a “thorough review” of foreign contracts related to the canal, a move seen as a concession to Washington. Posts on X reflect a polarized sentiment, with some users praising Hegseth’s tough stance as a necessary counter to China’s expansionism, while others warn of the economic fallout, citing Panama’s $2 billion annual trade with China, its second-largest trading partner after the U.S.
Breaking news updates indicate that Hegseth’s comments have already had ripple effects. On April 9, 2025, the U.S. State Department announces it will send a delegation to Panama next week to discuss “enhanced security cooperation,” including potential joint military exercises in the canal zone. Meanwhile, China’s Foreign Ministry spokesperson Lin Jian condemns Hegseth’s remarks as “baseless and provocative,” accusing the U.S. of “hegemonic interference” in Latin America. Lin reiterates that China’s presence in Panama is “commercial, not military,” and calls for the U.S. to respect Panama’s sovereignty. The Panama Canal Authority, which oversees the waterway’s operations, issues a statement on April 9, emphasizing that the canal remains “fully under Panamanian control” and that no foreign entity, including China, has operational authority over the canal itself.
Historically, the U.S. has intervened militarily in Panama to protect its interests, most notably during the 1989 invasion to oust dictator Manuel Noriega, who was accused of drug trafficking and threatening canal security. The operation, known as Operation Just Cause, resulted in the deaths of 200 Panamanian civilians and 23 U.S. soldiers, according to official estimates, though local groups claim the civilian toll was closer to 1,000. The invasion left a lasting mark on U.S.-Panama relations, with many Panamanians still wary of American military involvement. Hegseth’s refusal to rule out military action has sparked fears of a repeat scenario, with critics like Senator Bernie Sanders (I-Vt.) warning on April 9 that such a move would be “disastrous” for U.S. credibility in Latin America, potentially driving more countries into China’s orbit.
Economically, the stakes are high. The Panama Canal generates $4.5 billion in annual revenue for Panama, with tolls increasing by 5% in 2025 to fund a $2 billion expansion project aimed at accommodating larger vessels. Any disruption to canal operations, whether through military conflict or economic sanctions, could have global repercussions, particularly for the U.S., where 13% of maritime trade passes through the canal. Analysts at Goldman Sachs estimate that a 10% reduction in canal traffic could cost the U.S. economy $15 billion annually, with ripple effects on global supply chains already strained by recent trade wars.
Hegseth’s speech also comes in the context of broader U.S.-China tensions. On April 7, 2025, a Russian court fined Google $20 decillion for restricting Russian state media on YouTube, a symbolic move that underscores the global pushback against U.S. tech dominance, often in alignment with China’s interests. Meanwhile, the U.S. is grappling with domestic economic challenges, including a $5.8 trillion market loss in the S&P 500 since Trump’s initial tariff announcement on April 2, though markets rebounded on April 8 with the Dow surging 2,541.92 points after the tariff pause. Hegseth’s focus on the Panama Canal may be an attempt to project strength amid these challenges, but it risks further inflaming an already volatile geopolitical landscape.
As the U.S. and China vie for influence in Latin America, the Panama Canal remains a flashpoint. Hegseth’s vow to secure the waterway, backed by the specter of military action, underscores the high stakes of this geopolitical chess game. Whether this approach will deter China or provoke a broader conflict remains to be seen, but for now, the canal’s future hangs in the balance.
Sources:
- Video: Hegseth vows U.S. will secure Panama Canal against China
- Web sources: reuters.com, apnews.com, bloomberg.com, nytimes.com, wsj.com, theguardian.com, aljazeera.com, cnbc.com, ft.com, bbc.com, anadoluagency.com, scmp.com, panama-guide.com, canal-authority.pa
- Posts on X reflecting user sentiment and breaking updates
