The United States and Panama have signed a new defense and security agreement aimed at boosting oversight of the Panama Canal and pushing back against China’s expanding regional presence.
Defense Secretary Pete Hegseth called the pact vital to securing U.S. interests and deterring Chinese military and economic encroachment.
According to a statement released Wednesday by the Panama Canal Authority, Panama’s Minister for Canal Affairs and Hegseth signed a joint declaration reaffirming Panamanian sovereignty over the canal and pledging deeper military cooperation between the two nations. The agreement also confirms adherence to the Neutrality Treaty and Panama’s legal framework governing canal operations.
The pact introduces a cost-sharing model for services provided to U.S. warships and auxiliary vessels, with both countries aiming to maintain a “cost-neutral” structure. A mechanism to handle compensation is being developed in coordination with Panama’s Ministry of Security and will be evaluated in future stages. The Canal Authority described the declaration as the first step toward a broader partnership.
Hegseth said a memorandum of understanding has already been signed to lay the groundwork for granting U.S. naval vessels toll-free and priority passage, with a finalized agreement expected soon. He also confirmed that military collaboration now includes engineering, cybersecurity, and security coordination.
As part of a broader show of presence, the U.S. plans to deploy the USNS Comfort, a Navy hospital ship, to the region. Hegseth, who visited U.S. troops and toured the canal earlier this week, warned that China’s influence in the hemisphere is already extensive and growing.
“Beijing is operating in this region for military advantage and economic gain,” Hegseth said. “They run military facilities and ground stations, exploit resources, and use factory fishing fleets to strip food from our nations. This is about global military ambition.”
He emphasized that deterrence—not conflict—is the goal, and pointed to the growing concern over Chinese firms controlling infrastructure near the canal. “That control gives Beijing the ability to conduct surveillance and undermines both Panama’s and America’s security and sovereignty,” Hegseth said. “The United States will not allow China to threaten the canal’s operation.”
