In a diplomatic bid to ease mounting tensions between the United States and Panama, U.S. Secretary of Defense Pete Hegseth publicly reaffirmed America’s recognition of Panama’s sovereignty over the Panama Canal, despite President Donald Trump’s repeated assertions that the U.S. would “reclaim” the strategic waterway.

“We certainly respect the sovereignty of the Panamanians,” Hegseth said before leaving Panama for Washington, aiming to defuse controversy stirred by Trump’s remarks and assure Panamanian leaders that no takeover was planned.

The controversy erupted after a discrepancy between the joint statement issued by the two governments following high-level meetings earlier in the week.

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While Panama’s version explicitly reiterated its sovereignty over the canal, the U.S. version omitted such language, instead referencing a commitment to working within Panama’s constitutional framework—which already affirms national authority over the canal.

For many in Panama, the omission stoked fears of a reversal of the historic 1977 Torrijos–Carter Treaties, which led to the official transfer of the canal from U.S. to Panamanian control by the end of 1999.

Trump has sharply criticized that deal, repeatedly claiming the U.S. should never have relinquished the canal, and even told Congress in March that the United States was already “reclaiming” it.

Panamanian President Raul Mulino has fiercely pushed back against such statements, calling them an insult to Panama’s dignity and a threat to its national sovereignty.

Against this backdrop, Hegseth’s visit appeared crafted to restore calm. In carefully worded remarks, he praised Panama as a valued partner with deep historical ties to the U.S., including during the canal’s original construction in the early 20th century.

He also signed new defense agreements focused on enhanced joint training programs and increased rotation of U.S. military forces and equipment through Panama.

“He acknowledged the sovereignty of Panama over the Panama Canal,” Panama’s Minister of Public Security Frank Abrego stated at a joint press conference, signaling cautious optimism in response to Hegseth’s assurances.

Although Hegseth’s visit seemed to signal a softening of rhetoric, questions remain. Senior defense officials traveling with the secretary declined to specify how many additional American troops might be deployed to Panama or when such deployments might occur.

They also avoided detailing plans for potentially reviving Fort Sherman, the now-abandoned U.S. military jungle warfare school that once operated in Panama.

According to one defense official, speaking anonymously to describe the agreement, any future troop increases would require approval from the Panamanian government.

In exchange for U.S. military support, Panama has requested assistance in safeguarding the canal against modern threats, particularly cyberattacks and surveillance needs. The canal remains critical to global shipping, and approximately 40% of U.S. container traffic passes through it annually. Roughly 100 U.S. Navy vessels also traverse the canal each year—a figure that could spike in a Pacific conflict.

Despite assurances, the memory of past U.S. military action in Panama still casts a long shadow. The 1989 U.S. invasion to remove then-dictator Manuel Noriega left emotional scars across the country, where many remain wary of perceived American interference.

“There’s extraordinary sensitivities at hand,” said one senior defense official. “Any suggestion—by China or America—of infringing on Panama’s sovereignty over the canal is a non-starter in the country.”

The growing geopolitical competition between the U.S. and China adds further complexity.

Trump administration officials have voiced alarm over what they describe as China’s “malign influence” across Latin America, particularly through Beijing’s expansive Belt and Road Initiative.

Through this global infrastructure program, China has significantly boosted its presence in the region, raising concerns in Washington about strategic encroachment.

In a notable pivot during the trip, Hegseth appeared to recalibrate the administration’s messaging, adding a critical qualifier to Trump’s earlier declaration: “Together, we are going to take back the canal from China’s influence,” he said, shifting the focus from reclaiming the canal itself to limiting foreign control over its operations.

That shift followed Panama’s own recalibration earlier this year. In February, President Mulino announced Panama’s withdrawal from the Belt and Road Initiative—a decision that won praise in Washington and was likely a factor in both Secretary of State Marco Rubio’s visit that same month and Hegseth’s subsequent trip.

Throughout his visit, Hegseth emphasized his respect for Mulino’s leadership and described him as a “long-term partner,” reinforcing the U.S. commitment to a collaborative relationship with Panama.

At the same time, he underscored the strategic importance of the canal to American national security, calling it “key terrain” in both economic and military terms.

The reaffirmation of Panama’s control over the canal, paired with renewed military cooperation, signals a reset in the bilateral relationship—one aimed at both easing local fears and countering global rivals.

Whether Hegseth’s reassurances are enough to allay lingering skepticism in Panama remains to be seen. But for now, the visit represents a strategic recalibration—balancing diplomatic respect with growing geopolitical urgency.