U.S. Secretary of Defense addresses growing Chinese influence in Panama

Panama City is currently entangled in complexities surrounding American control and the Panama Canal. Recently, BlackRock, an American investment firm, was set to finalize an agreement to purchase 43 ports from a Hong Kong operator, including two ports in Panama. However, this signing, scheduled for April 2, 2025, has been postponed amidst increasing geopolitical concerns. The discussions emerge as President Donald Trump has reiterated claims that the U.S. was overcharged for using the canal since relinquishing control over it more than two decades ago. The Trump administration has accused China of exerting influence over the canal, an allegation Panama's government has firmly denied. To address these concerns, Defense Secretary Pete Hegseth will embark on a visit to Panama next week. His visit is timed with the 2025 Central American Security Conference, aiming to bolster partnerships with Panama and surrounding nations. While Hegseth's itinerary includes crucial meetings with regional leaders, no formal discussions regarding the canal have been reported. This visit follows Trump's claims that the U.S.’s withdrawal from control was a mistake made by former President Jimmy Carter, whom he accused of acting unwisely. Trump’s administration argues that the control of the canal is vital not only for commerce but also for national security, as it significantly impacts military transit across the region. The issue is further complicated by the recent announcement that a Hong Kong-based conglomerate agreed to sell its controlling stake in a subsidiary, which operates ports adjacent to the Panama Canal, to a consortium combining American interests, including BlackRock. This agreement could shift the operational oversight of critical shipping lanes back to U.S. hands, despite Panama insisting it maintains full control over the canal operations. Hegseth's trip will also include a stop at Eglin Air Force Base to engage with military service members in the region, underlining the importance of U.S. military presence. The intertwinement of economic and military interests underpins the conversations happening in Panama and highlights the strategic significance the Panama Canal holds for both the U.S. and China in their ongoing power dynamics in the Western Hemisphere.