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US secretary of defence Pete Hegseth will travel to Panama early this week as Washington increases pressure on the Central American nation for alleged Chinese influence over its famous canal.
President Donald Trump has repeatedly threatened to retake control of the Panama Canal, the 110-year-old waterway that handles around 5 per cent of global maritime trade, alleging that a concession for two ports at either end held by Hong Kong-based conglomerate CK Hutchison posed a national security risk.
In response to the US pressure, an investor group led by BlackRock offered to buy CK Hutchison’s ports division, which holds the concession, in a deal worth some $22.8bn. However, Chinese authorities are reviewing the transaction, casting doubt on whether it will be completed.
Hegseth plans to attend the Central American Security Conference in Panama and is expected on Tuesday to meet President José Raúl Mulino.
Hegseth’s trip will “drive ongoing efforts to strengthen our partnerships with Panama and other Central American nations towards our shared vision for a peaceful and secure Western Hemisphere”, said Pentagon spokesperson Sean Parnell.
US military personnel were visible in Panama City last week as the two countries concluded the initial phase of annual military exercises focused on the security and interoperability of the Panama Canal. The US military said more joint exercises would be held this week.
NBC News reported last month that the White House had directed the Pentagon to draw up plans to potentially increase US troop presence in Panama, including an option for American soldiers to seize the waterway by force. The White House did not respond to a request for comment.
Panama has been reeling from suddenly becoming a US foreign policy priority. The move by Washington comes as Mulino is dealing with several domestic challenges including a sharp economic slowdown, water risks in the canal and the future of a large copper mine that it closed 18 months ago.
Mulino and Hegseth agreed in February “to expand co-operation between the US military and Panama’s security forces” and safeguard the canal, according to a Pentagon readout of the call.
Panama has also been trying to placate Trump by cracking down on migrants heading for the US via the Darién Gap, a 60-mile stretch of dense jungle between Colombia and Panama.
The US secretary of state Marco Rubio’s first trip abroad was to Panama earlier this year. Rubio told Mulino that Trump views “the current position of influence and control of the Chinese Communist party over the Panama Canal” as a violation of the canal’s neutrality treaty, a state department spokesperson said at the time.
Mulino and other Panamanian officials have said the canal is fully controlled by the independent Panama Canal Authority (PCA) and that Panama’s sovereign control was not up for debate.
Separately, Panama’s comptroller is conducting a forensic audit of the CK Hutchison canal concession, with local legislators alleging irregularities. CK Hutchison has denied that Trump’s criticism played a role in its decision to sell the ports and said the deal was “purely commercial in nature”.
On Friday, deputy secretary of state Christopher Landau spoke to Panama’s foreign minister Javier Martínez-Acha. The state department said the pair discussed the “importance” of the audit.
“The visit reflects how important relations with Panama have become for the US,” said Orlando Pérez, professor of political science at the University of North Texas. He added that if the audit were to find irregularities, as many believe it would, then “the pressure for Panama’s regulator to take some action against the port concessions will be significant”.
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