Defense Secretary Pete Hegseth’s visit to Panama this week has Latin America experts speculating that President Donald Trump’s threat to take back the Panama Canal has waned — and shifted to a more cooperative approach to blunt China's influence there and across the region.
"Together with Panama in the lead," Hegseth said, "we will keep the canal secure."
That's a departure from the pledge Trump made, when he took office in January, to outright seize the canal, whose control the U.S. handed to Panama a quarter century ago. His key reason: Beijing, he said, has too much presence in that country, where Chinese companies have spent billions building major ports and other infrastructure in the past decade.
Most hemispheric affairs experts agree communist China's burgeoning financial and diplomatic influence in Latin America and the Caribbean is unsettling. But Trump's declaration has been widely rebuked as a throwback to the predatory gunboat diplomacy of centuries past.
Still, to placate Trump, Panama has tried to look tougher on China. Before Defense Secretary Hegseth arrived this week, for example, Panama President José Raúl Mulino's government said it was auditing and sanctioning Chinese companies there — including Hong Kong port operator CK Hutchison.
Latin America analysts speculate that’s why Hegseth did not mention Trump’s canal seizure warning — and instead seemed to soften the U.S. president's posture.
“The President’s negotiating approach is to stake out an opening maximalist position, like 'the U.S. takes back the canal,'" Aaron Rosen, president of the World Affairs Council of Miami, told WLRN, "and then push for the best deal he can get, like what we heard this week: 'Together the U.S. and Panama will take back the canal from Chinese influence.'”
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China does not have any role in operating the Panama Canal per se. But Trump has warned that its large footprint around the canal may violate a treaty that mandates the waterway's geopolitical neutrality.
Secretary of State Marco Rubio expressed that concern during his own visit to Panama in January.
At a meeting with Mulino in Panama City, Hegseth said, "I want to be very clear, China did not build this canal,” which the U.S. constructed in the early 1900s, "and China will not weaponize this canal.
"Together with Panama in the lead, we will keep the canal secure and available for all nations through the deterrent power of the strongest, most effective and most lethal fighting force in the world.”
Rosen said that more cooperative tack could make Panama and other countries in the hemisphere more inclined to partner with the U.S. on economic development projects instead of with China.
The U.S. in fact has been criticized for not promoting more public and private sector investment in Latin America and the Caribbean, while China's massive Belt and Road Initiative has been lavishing infrastructure financing on those countries.
“That’s the balance," said Rosen, who believes Trump is prioritizing Latin America more than the U.S. has done historically.
"How to prioritize and deepen engagement with the region, like near-shoring manufacturing, while not being overly aggressive in a way that drives countries to other partners like China.”
Even so, while the Spanish version of the joint Panama-U.S. statement at the end of Hegseth’s visit stressed Panama’s sovereignty over the canal, the English version did not.
After Hegseth left Panama, China issued a statement calling the Trump administration's rhetoric "a sensationalist campaign about 'the theoretical Chinese threat,'" adding that the U.S. is "blackmailing" countries like Panama.
Mulino and Hegseth also discussed the passage fees the Panama Canal charges U.S. vessels, which Trump insists are too high (although data show they're in line with other major shipping lanes like the Suez Canal).
The Panama Canal handles 6% of the world's maritime cargo traffic — more than two-thirds of it going to and from U.S. docks like PortMiami.
This week the U.S. Senate confirmed Trump's appointment of Miami-Dade County Commissioner Kevin Marino Cabrera as the new U.S. ambassador to Panama.
