U.S.-Panama Pact Locks China Out of Canal

U.S. Defense Secretary Pete Hegseth addressed a crowd at Vasco Nunez de Balboa Naval Base in Panama on April 8, 2025, spotlighting a bolstered U.S.-Panama alliance.

He targeted the Panama Canal’s security, a linchpin for $250 billion in annual trade, amid rising tensions with China.

“China didn’t create it, doesn’t manage it, and won’t exploit it,” Hegseth stated, underscoring U.S. intent to curb Beijing’s reach.

The canal, launched in 1914, channels 40% of U.S. shipping and 70% of vessels to or from American ports, cutting 8,000 miles off coast-to-coast trips.

Nearly 100 U.S. military ships use it yearly. Yet, Chinese firms now grip key canal-area infrastructure, prompting U.S. worries about espionage risks.

Panama’s President Molino ditched China’s Belt and Road Initiative, a decision Hegseth praised as a counter to Beijing’s sway.

U.S.-Panama Pact Locks China Out of Canal

The U.S. injects over $5 million through the Army Corps of Engineers to revamp Pier 3 at the base, enhancing canal and Pacific security.

Meanwhile, joint military efforts escalate. The U.S. Coast Guard cutter Kimball anchors in Panama City, partnering with Panama’s Aeronaval Service on drug interdiction.

USS Chosen and USS Normandy, missile cruisers, patrol and train Panamanian forces, while U.S. aircraft bolster air and sea defenses. A new Joint Security Cooperation Group in Panama City syncs these operations.

Next year, Panama hosts the 2026 Panamax exercise to safeguard canal commerce. Hegseth confirmed more training and intel-sharing with Panama’s forces.

He invoked Teddy Roosevelt’s 1906 visit, noting Trump’s view of the canal as a hemispheric cornerstone tied to a shared, costly past.

The real stakes emerge from the numbers. China’s foothold threatens a canal both nations built, where workers perished together.

Now, Panama and the U.S. aim to lock out foreign leverage. For global trade, it’s a vital vein—especially for the U.S., its top user.

This move marks a calculated step. Hegseth’s visit, backed by military muscle and cash, eyes a canal free of China’s shadow.

Business watches closely as this artery, forged by history, faces a modern tug-of 380 words shape a grounded tale of strategy and power.

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