In a bold move to counter growing Chinese influence in a critical global trade artery, the United States has announced a significant expansion of its security partnership with Panama, focused squarely on the Panama Canal.

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During a joint press conference in Panama City, U.S. Defense Secretary Pete Hegseth and Panamanian Public Security Minister Frank Abrego unveiled a new agreement that strengthens military and strategic cooperation between the two nations.
“The era of capitulating to coercion by the communist Chinese is over,” Hegseth declared at the close of a regional security summit.

At the heart of the deal is a memorandum of understanding to deepen cooperative security operations and a forthcoming declaration aimed specifically at protecting the Panama Canal’s operations and infrastructure. Under the agreement, U.S. warships and auxiliary vessels will receive ‘first and free’ passage through the canal.

The arrangement will also see a renewed U.S. military presence at key former American bases, including Rodman Naval Station, Howard Air Force Base, and Fort Sherman. The U.S. has already deployed a considerable force to the region: two guided-missile cruisers, a Coast Guard cutter, four F-18s, and over 1,000 service members are now stationed nearby.

The announcement comes amid rising tension over Chinese commercial activities in Panama, particularly the pending acquisition of port operations at both ends of the canal by a consortium led by U.S. investment firm BlackRock. The ports are currently operated by Hong Kong-based CK Hutchison, and the deal—still pending closure—has drawn sharp criticism from Beijing.

President Trump has previously made headlines with threats to “take back” the canal, citing what he called “exorbitant tolls” for U.S. vessels and framing the 1999 handover of the canal to Panama as a strategic blunder.

Panama, for its part, has reaffirmed that the canal remains fully under Panamanian sovereignty, as outlined in the 1977 Neutrality Treaty. The Panama Canal Authority said the new agreement honors that treaty while also reinforcing anti-discrimination provisions and enabling compensation structures for U.S. military vessels transiting the waterway.

Beyond canal operations, the partnership also targets regional security threats, including joint efforts to curb transnational crime and manage migration at Panama’s borders. Authorities highlighted a striking 99% reduction in illegal crossings at the Darién Gap over the past year.

The U.S. Navy hospital ship USNS Comfort is also set to visit Panama this summer, delivering medical care as part of a broader effort to strengthen diplomatic and humanitarian ties.