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US and Panama Strengthen Efforts to Counter Chinese Influence Over Panama Canal

Defense Secretary Pete Hegseth's visit highlights deepened defense ties as a Panamanian audit reveals $1.2 billion in unpaid fees by Chinese-linked port operator.

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(From left to right) Panama Canal Authority administrator Ricaurte Vasquez (left), US Defense Secretary Pete Hegseth and Southcom Commander Navy Adm. Alvin Holsey pose for a photo during a tour of the Panama Canal's Miraflores Locks, in Panama City on April 8, 2025.
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Panama Ports, a subsidiary of logistics giant CK Hutchison, won the concession to operate Balboa port on the Pacific side of the canal and Cristobal port on the Atlantic side in 1997

Overview

  • US Defense Secretary Pete Hegseth and Panamanian officials have pledged to jointly 'take back' the Panama Canal from Chinese influence, emphasizing security cooperation.
  • A Panamanian audit found that Panama Ports, operated by Hong Kong-based CK Hutchison, failed to pay $1.2 billion in concession fees, raising questions about its contract compliance.
  • CK Hutchison's planned sale of its Panama Canal ports to a US-led consortium led by BlackRock faces delays due to a Chinese antitrust review, complicating the transfer of control.
  • Panama recently withdrew from China's Belt and Road Initiative, signaling alignment with US efforts to counter Beijing's regional influence.
  • The Trump administration has proposed increased US military presence in Panama, citing concerns over China's potential surveillance and strategic advantages in the canal region.