Defense Secretary Pete Hegseth announced Wednesday that U.S. and Panama officials would sign a "framework" agreement allowing U.S. warships to travel "first and free" through the Panama Canal.
Hegseth said the two countries had already signed a memorandum of understanding on security cooperation and that they would finalize a document guaranteeing U.S. warships and auxiliary vessels priority, toll-free passage through the canal.
When Secretary of State Marco Rubio visited Panama earlier this year, the State Department claimed it had secured a deal for the free passage of U.S. warships. But Panamanian President José Raúl Mulino denied any such agreement had been reached.
"I completely reject that statement," Mulino said at the time. The Panama Canal Authority also said it had "not made any adjustments" to its fee structure.
US, PANAMA 'TAKING BACK' CANAL FROM 'CHINA'S INFLUENCE,' SAYS HEGSETH
Earlier Wednesday, Hegseth warned that China's military presence in the Western Hemisphere is "too large" as he visited Panama to meet with the nation's officials, visit U.S. troops and tour the canal ports.
"Make no mistake, Beijing is investing and operating in this region for military advantage and unfair economic gain," Hegseth said in brief remarks to the press. "China's military has too large of a presence in the Western Hemisphere. They operate military facilities and ground stations that extend their reach into space. They exploit natural resources and land to fuel China's global military ambitions. China's factory fishing fleets are stealing food from our nations and from our people."
He added that war with China is "not inevitable," and the U.S. does not seek war in any form. "Together, we must prevent war by robustly and vigorously deterring China's threats in this hemisphere."
To strengthen military ties with Panama and reassert influence over the canal, the U.S. will deploy the USNS Comfort, a Navy hospital ship, to the region.
Hegseth vowed Tuesday that the U.S. will "take back" the Panama Canal from Chinese influence, pointing to port operations controlled by Hong Kong-based CK Hutchison.
The secretary later said Wednesday that he and Panamanian officials would be signing an agreement that U.S. warships would travel "first and free" through the Panama Canal.
TRUMP, HEGSETH REVEAL WHOPPING FIGURE THEY WANT FOR THE NEXT PENTAGON BUDGET
Last month the conglomerate agreed to a $19 billion deal to sell a group of 43 ports, including two in Panama, to U.S.-based BlackRock,
Trump hailed the agreement, seen as a solution to his complaints that the canal was owned by China, but now that deal may fall apart.
China has criticized the deal, opening up antitrust probes, and a Panamanian official has accused CK Hutchison of failing to properly renew its contract in 2021 and owing the country $300 million.
After meeting with Mulino, Hegseth said Tuesday the U.S. will not allow China to threaten the canal's operation.
"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," he said.
US, PANAMA 'TAKING BACK' CANAL FROM 'CHINA'S INFLUENCE,' SAYS HEGSETH
Hegseth alluded to the ports owned by CK Hutchison. "China-based companies continue to control critical infrastructure in the canal area," he said. "That gives China the potential to conduct surveillance activities across Panama. This makes Panama and the United States less secure, less prosperous and less sovereign. And as President Donald Trump has pointed out, that situation is not acceptable."
The Chinese embassy in Panama hit back: "The U.S. has carried out a sensationalistic campaign about the 'theoretical Chinese threat' in an attempt to sabotage Chinese-Panamanian cooperation, which is all just rooted in the United States' own geopolitical interests."
The war of words in Panama comes as China and the U.S. are now locked in a trade war, where Trump slapped Chinese goods with a total 104% tariff. China retaliated with 84% tariffs on U.S. goods.
