The United States and Panama have signed a new defense and security pact to reinforce control over the Panama Canal. Defense Secretary Pete Hegseth claims this move is critical to push back against China’s growing grip in the region.
In a press release posted Wednesday night, the Panama Canal Authority confirmed that Panama’s Minister for Canal Affairs and Hegseth signed a joint declaration reaffirming Panamanian sovereignty and outlining new military cooperation.
The deal “reaffirms respect for, and the recognition of, Panamanian sovereignty over the interoceanic waterway,” the Canal Authority stated.
It also upholds both nations’ commitment to the Neutrality Treaty and the legal framework governing 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
The declaration goes beyond words. It lays out plans for a cost-sharing model to cover services provided to U.S. warships and auxiliary vessels, aiming to keep it “cost-neutral.”
“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.”
Secretary of Defense Pete Hegseth speaks in Panama City on April 9, 2025. (FRANCO BRANA/AFP via Getty Images)
A broader framework is also in the works, guaranteeing U.S. warships “first and free” passage through the Panama Canal. Hegseth announced that U.S. and Panamanian officials had signed a memorandum of understanding and that a final document is being prepared to formally secure toll-free priority for American naval vessels.
The Canal Authority emphasized that this agreement is just 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 military coordination, the Panama Canal Authority confirmed that collaboration includes engineering, security, and cybersecurity, key focus areas for both governments as they counter foreign interference.
Just as the U.S. prepares to deploy the USNS Comfort, a Navy hospital ship, to the region in a show of presence and partnership, Hegseth visited U.S. troops, met with Panamanian officials, and toured the canal earlier this week. He warned that China’s reach in the Western Hemisphere is already significant and growing.
Panama’s President Jose Raul Mulino shakes hands with Secretary of Defense Pete Hegseth during the signing of a bilateral agreement in Panama City on April 9, 2025. (FRANCO BRANA/AFP via Getty Images)
“Beijing is investing and operating in this region for military advantage and unfair economic gain,” Hegseth said. “They operate military facilities and ground stations extending their reach into space, exploiting natural resources and land to fuel China’s global military ambitions. China’s factory fishing fleets are stealing food from our nations and people.”
War is not the goal, according to Hegseth. “Together, we must prevent war by deterring China’s threats in this hemisphere,” he said.
The U.S. is taking steps to counter Chinese-controlled infrastructure in Panama, Hegseth stated.
“China-based companies control critical infrastructure in the canal area, giving China the potential to conduct surveillance activities across Panama, making both Panama and the United States less secure, less prosperous, and less sovereign. This situation is unacceptable,” he added.
Panama’s President Jose Raul Mulino (C) looks on as Panama’s Security Minister Frank Abrego (L) and Secretary of Defense Pete Hegseth get ready to sign a bilateral agreement in Panama City on April 9, 2025. (FRANCO BRANA/AFP via Getty Images)
Hegseth stated, “The United States will not allow China to threaten the canal’s operation,” adding, “To this end, the United States and Panama have done more in recent weeks to strengthen our defense and security cooperation than we have in decades.”
Despite the growing military and political coordination, Panamanian President José Raúl Mulino has publicly denied China controls the canal.
“I completely reject that statement,” Mulino said, countering earlier claims from the U.S. State Department that a deal had been reached to guarantee toll-free passage for U.S. warships. The Canal Authority clarified 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.
Fox News’ Morgan Philips contributed to this report.
