News
Thursday 10th April 2025.
April 9, 2025
U.S. Defense Secretary Pete Hegseth confirmed Wednesday, April 9, that U.S. military and auxiliary vessels will have priority and free passage through the Panama Canal , as part of an agreement with Panamanian authorities.
“We said it yesterday. Priority and free of charge for US military and auxiliary vessels,” Hegseth said when asked about the issue by a reporter.
“We are working directly with the Panama Canal authorities to ensure that access is free and first,” Hegseth insisted, in what represents one of the most explicit statements yet regarding Washington’s strategic interests in the interoceanic waterway.
The announcement comes amid tensions between the two countries specifically over the operation of the Canal. US President Donald Trump insists on recovering the maritime passage, citing alleged Chinese influence in its operation, a claim Panama vehemently denies.
However, what the United States claims is free passage, the Panama Canal interprets as a mechanism for Washington’s warships to receive compensation for services.
This was stated by the Minister of Canal Affairs, José Ramón Icaza, to journalists.
“We will seek a mechanism to ensure that warships and auxiliary vessels have a service compensation system. That is, a way to ensure they are cost-neutral ,” the minister explained.
He added that it does not represent “a free passage.” It is, he added, a mechanism similar to others the Canal has with the Ministry of Security. “The Panama Canal requires security services, especially in the area acquired in August 2023 for 22,000 hectares and also the expanded basin, and in this way we can offset the costs of the warships with the services we receive from the Ministry of Security,” he stated.
To this end, Hegseth and the Panama Canal authorities signed a joint declaration that, according to Minister Icaza, recognizes the sovereignty of the Panama Canal, compliance with the Neutrality Treaty, and respect for the legal framework for maritime passage.
The U.S. Secretary of Defense arrived on Panamanian soil last Monday evening. On Tuesday, he met with President José Raúl Mulino, visited the Miraflores Locks of the Panama Canal, and participated in activities of the Ministry of Public Security.
Icaza , the administrator of the interoceanic waterway, Ricaurte Vásquez, and Hegseth met at the Hilton Hotel in the capital, precisely the place where the Central American Security Conference is being held.
Upon arrival, Icaza simply said, “Let’s talk,” in a tone that contrasted with the formality that usually surrounds this type of diplomatic meeting.
The meeting broke with traditional protocol. Typically, meetings of this magnitude are held at the Canal Administration Building in Balboa, with the solemnity typical of meetings between high-ranking officials or heads of state.
This time, however, the Canal administrator traveled to the coastal strip. The day before, it was Vásquez who, wearing a suit and tie, welcomed Hegseth at the Miraflores Locks, in the terrain he knows and dominates.
But this Wednesday, the scene changed. The administrator had to leave his comfort zone and show up at the Hilton wearing more work-wear attire: khaki pants and a shirt with the ACP logo. Next to him was the Vice President of Legal Counsel, Agenor Correa. The video captured by La Prensa reveals a more reserved Vásquez, almost off-script.
Records from the Panama Canal Authority indicate that from 1998 to the end of fiscal year 2024 (26 years), of a total of 373,039 vessels, 994 (0.3%) corresponded to transits of warships and submarines of the United States Navy.
During this period, transit revenue from this concept has totaled $25.4 million, which is equivalent to less than $1 million per year.
Tolls are the fees that ships pay to use the Canal. Generally speaking, they are determined according to parameters related to the size of the vessel.
The Panama Canal does not charge vessels based on their nation of origin or destination. Tolls vary depending on the type of vessel (e.g., container ships, bulk carriers, oil tankers, or cruise ships) and its size (e.g., tonnage, number of TEUs for container ships).
The adopted system follows the precept contained in Article 315 of the Political Constitution of the Republic of Panama , which states that the Panama Canal “shall remain open to the peaceful and uninterrupted transit of vessels of all nations.”
The government of Panama and the United States of America (USA) signed a memorandum of understanding on Wednesday, April 9, marking a new phase of cooperation in security and defense matters. This comes at a time when Washington insists that the Panama Canal operates under Chinese influence, a claim Panamanian authorities vehemently deny.
The agreement was finalized during a visit to Panama by U.S. Defense Secretary Pete Hegseth and includes key aspects such as an increase in the long-term rotational military presence in the country, the establishment of a jungle school at the former Sherman base in Colón, and new facilities in the Rodman area, at the Pacific entrance to the Canal.
Sherman, located on the Atlantic coast, served for decades as a jungle training center. Rodman, for its part, was the naval base from which U.S. ships operated in the Pacific.
Both facilities were returned to Panama in 1999 after the final withdrawal of US troops, as part of the Torrijos-Carter treaties.
Now, 25 years later, the United States, under Donald Trump’s second administration, is returning to those same spaces, but with a new narrative: security cooperation, the fight against transnational threats, and the protection of the Canal.
Sherman, for example, began operations in 1914 as part of the coastal defense fortification complex for the defense of the Panama Canal; it was a sort of Atlantic counterpart to Fort Kobbe. It was one of the first three installations planned for the Canal’s port defense.
The memorandum of understanding was signed by Hegseth and Panama’s Minister of Public Security, Frank Ábrego , during the Central American Security Conference being held at the Hilton Hotel in Panama City, an event attended by countries from the region and the Caribbean.
During a joint press conference, Hegseth made it clear that the memorandum also aims to strengthen deterrent capabilities against threats in the vicinity of the Panama Canal, although he assured that everything will be done “in compliance with the neutrality treaty” that governs the interoceanic waterway.
“We’re not talking about interventionism, but rather joint collaboration, shoulder to shoulder,” the Pentagon chief stated, attempting to allay fears about a possible militarization of the Canal.
Hegseth even alluded to President Donald Trump’s statements about “taking back” the Canal, explaining that this message should be understood as a reaffirmation of the strategic alliance between the two countries. “We are partners and we will make efforts to maintain its security,” he emphasized.
The official was direct in naming China as the main adversary in the region. “We want to deter China’s malicious presence in our backyard, but we don’t want conflicts,” he said. “What we seek is to prevent China’s influence from taking root and to expel them from the Panama Canal.”
The United States has persistently fueled the narrative of alleged investments and growing ties between Chinese companies in and around the Canal area, an issue that has been a source of diplomatic tension over the past four months.
Darien, migration and deployment
The Secretary of Defense also praised the work of Panamanian authorities in immigration control in Darien, describing the reduction in the flow of irregular migrants through that jungle region as “incredible.”
As part of this new rapprochement, Hegseth announced that a U.S. warship will be in Panama this summer to strengthen bilateral collaboration, and noted that two U.S. vessels are already participating in the military exercises known as Panamax 2025.
“We are seeking peace through deterrence, to avoid the unfair practices that China has used,” he reiterated.
Panama clarifies: they are not military bases
For his part, Public Security Minister Frank Ábrego denied that the agreement contemplates the establishment of permanent US military bases or defense sites on Panamanian territory. He explained that it involves security cooperation, information exchange, and infrastructure for training and combating common threats.
Ábrego insisted that Panama will not relinquish its sovereignty and that the United States recognizes that position. He noted that the agreement seeks to strengthen Panama’s response capacity to transnational threats such as organized crime, drug trafficking, and cyberattacks.
“No country can face these external threats alone,” he said. “Shared and timely intelligence is the most effective tool to anticipate and neutralize them.”
President José Raúl Mulino acted as an honorary witness at the signing of the agreement.
The Ministry of Commerce and Industry (MICI) confirmed this Wednesday, April 9, that it formally received the suspension of the international arbitration filed by the Canadian company First Quantum Minerals against the Panamanian government.
According to the MICI statement, First Quantum suspended the arbitration it had initiated before the International Centre for Settlement of Investment Disputes (ICSID), while Minera Panamá withdrew from the process filed with the International Court of Arbitration of the International Chamber of Commerce (ICC).
Just last Monday, April 7, Minister Julio Moltó confirmed that the government was still awaiting the formal suspension of said arbitrations, filed against the country due to the stoppage of the copper mine following the unconstitutionality ruling issued by the Supreme Court of Justice (SCJ) in 2023.
First Quantum announced on Monday, March 31, that after holding talks with the Panamanian government , they had agreed to withdraw from the arbitration proceedings before the ICC.
On February 27, Mulino stated during a press conference that his government would meet with First Quantum once the arbitration proceedings were lifted.
“I reaffirm that to begin any type of conversation with First Quantum , the six or seven arbitrations against Panama must be suspended. We must have the comfort of discussing whatever we need to discuss at the appropriate time,” he stated at the time.