TAIPEI, Taiwan – China’s control of Panama Canal ports is an unacceptable threat to U.S. security, Defense Secretary Pete Hegseth said during a visit to the central American nation, underlining U.S. efforts to bolster its influence in the Western hemisphere.
The Panama Canal has become a focal point of geopolitical tension, as China’s involvement in its ports raises U.S. concerns over control and influence in a key global trade route.
U.S. President Donald Trump repeatedly said that the United States is being overcharged to use the Panama Canal and that China has influence over its operations.
Speaking at a ribbon cutting for a new U.S.-funded dock at the Vasco Nuñez de Balboa Naval Base after a meeting with Panama’s President José Raúl Mulino, Hegseth said the U.S. will not allow China or any other country to threaten the canal’s operations.
“To this end, the United States and Panama have done more in recent weeks to strengthen our defence and security cooperation than we have in decades,” he said.
China-based companies, Hegseth said, continue to control critical infrastructure in the canal area.
“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.”
In response to Hegseth’s remarks, the Chinese embassy in Panama slammed the U.S. government in a statement on X.
It said the U.S. has used “blackmail” to further its own interests and that who Panama carries out business with is a “sovereign decision of Panama … and something the U.S. doesn’t have the right to interfere in.”
“The US 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 embassy said.
There have been growing calls in Washington for action to loosen Beijing’s influence stemming from Chinese and Hong Kong companies’ control over ports in Panama and elsewhere in the Western hemisphere.
China and the U.S. are also waging a tit-for-tat trade battle, which threatens to stunt the global economy. The U.S. now imposes a 104% tariff on Chinese imports after a series of tariff hikes this year.
On Feb. 3, U.S. Secretary of State Marco Rubio threatened the Panamanian leader with potential American retaliation if his country didn’t immediately reduce Chinese influence over the canal.
The Panamanian government said that it was auditing the lease held by the Hong Kong consortium, which operates ports at both ends of the canal, and late on Monday concluded that there were irregularities.
The Hong Kong consortium, however, had already announced that CK Hutchison Holdings would be selling its controlling stake in the ports to a consortium including BlackRock Inc., effectively putting the ports under American control once the sale is complete.
CK Hutchison Holdings, a Hong Kong-based conglomerate, has operated the Balboa and Cristóbal ports at the Pacific and Atlantic ends of the Panama Canal through its subsidiary, Panama Ports Company, since the late 1990s.
In March 2025, CK Hutchison agreed to sell a 90% stake in Panama Ports Company to a consortium led by U.S. investment firm BlackRock Inc., as part of a US$22.8 billion deal that includes control over 43 ports in 23 countries.
At that time, Hong Kong Chief Executive John Lee said concerns about the deal “deserve serious attention,” possibly hinting at some form of legal action.
“We oppose the abusive use of coercion or bullying tactics in international, economic and trade relations,” Lee told journalists in Hong Kong. The Chinese territory would handle any commercial transaction “according to the law,” he said.
“The Hong Kong Special Administrative Region Government urges foreign governments to provide a fair and just environment for enterprises, including enterprises from Hong Kong,” Lee said.
Edited by Mike Firn and Stephen Wright.
This content originally appeared on Radio Free Asia and was authored by Taejun Kang for RFA.