Hegseth lauds Panama in visit, sounds cooperative tone on canal

Michael McDonald, Bloomberg News on Apr 8, 2025

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U.S. Defense Secretary Pete Hegseth pledged deeper cooperation with Panama on a visit to the Central American country’s canal zone, striking a conciliatory tone after months of tension over Donald Trump’s vow to take back control of the waterway.

In a news conference Tuesday, Hegseth pointed to ports operated by Hong Kong-based CK Hutchison Holdings Ltd. on either end of the trade route as potential threats to U.S. and Panamanian interests. But he didn’t assert, as Trump has, that China controls the canal or that the U.S. should reclaim it.

“Together with Panama in the lead we will keep the canal secure and available for all nations,” Hegseth said. “We wll do this in partnership with Panama. Together we will take back the canal from China’s influence.” He said U.S. military forces were conducting joint exercises with Panama as he spoke.

The canal, which was built by the U.S. but handed over to Panamanian control at the end of 1999, has become a flashpoint since Trump came back into office this year. Panama President Jose Raul Mulino has pushed back on Trump’s narratives and insisted that his country won’t return the canal, but he has also made clear his interests lie with the US by pledging to cooperate on migration and other issues.

Last month, a consortium led by BlackRock Inc. agreed to buy Hutchison’s ports, though that deal has been delayed because of scrutiny in Beijing. This week, Panama’s general comptroller concluded an audit of the Hutchison ports and alleged wrongdoing in the 2021 renewal of their concession. Another agency could use that information to rescind Hutchison’s contract.

Panama’s attorney general has opened an investigation into the Hutchison concession renewal, according to a notice filed Tuesday.

While Hegseth didn’t mention Hutchison directly, he made clear that ownership of the ports was a key priority for the Trump administration.

“China-based companies continue to control critical infrastructure in the canal area,” he 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. As President Donald Trump has pointed out, that situation is not acceptable.”

He praised Mulino for withdrawing the country from China’s Belt and Road initiative, a global lending program. In a post on X, he called it an honor to speak with the president.

“You and your country’s hard work is making a difference,” he said. “Increased security cooperation will make both our nations safer, stronger, and more prosperous.”