In a significant move reflecting the shifting dynamics of international relations, US Secretary of Defense Pete Hegseth is scheduled to visit Panama early this week. This visit comes as Washington intensifies its scrutiny of the Central American nation regarding claims of Chinese influence over the Panama Canal, a critical artery for global maritime trade.

The Panama Canal, inaugurated over a century ago, facilitates approximately 5 percent of the world’s trade, making it a vital geopolitical asset. Former President Donald Trump has repeatedly expressed concerns over the US’s strategic interests in the region, threatening to reclaim control of the canal. His administration has specifically criticized the concession held by CK Hutchison, a Hong Kong-based conglomerate, for two ports positioned at either end of the canal, citing it as a potential national security risk.

In response to increasing US pressure, an investment consortium led by BlackRock has proposed a substantial acquisition of CK Hutchison’s ports division for an estimated $22.8 billion. However, the deal’s completion is currently under review by Chinese regulatory authorities, injecting uncertainty into the situation.

During his visit, Hegseth is expected to participate in the Central American Security Conference, where he will meet with Panama’s President José Raúl Mulino on Tuesday. Pentagon spokesperson Sean Parnell emphasized that Hegseth’s trip aims to “drive ongoing efforts to strengthen our partnerships with Panama and other Central American nations towards our shared vision for a peaceful and secure Western Hemisphere.”

Last week, US military personnel were visibly present in Panama City as both countries wrapped up the initial phase of their annual military exercises. These exercises focus on ensuring the security and interoperability of the Panama Canal, a strategic point of interest for US military operations. The US military has indicated that additional joint exercises are planned for this week, further underscoring the heightened military engagement in the region.

In a report last month, NBC News revealed that the White House has tasked the Pentagon with drafting contingency plans that could potentially increase the US troop presence in Panama. These plans include options that would allow American forces to seize control of the canal if deemed necessary. As of now, the White House has not provided any comments on this matter.

Secretary of State Marco Rubio, during a visit to Panama earlier this year, articulated the US administration's stance on the situation. He made it clear to President Mulino that the Trump administration views the Chinese Communist Party's influence over the canal as a breach of the neutrality treaty that governs its operations. Despite this external pressure, Mulino has firmly reiterated that the Panama Canal is under the complete control of the independent Panama Canal Authority (PCA) and that questions of sovereignty are not open for negotiation.

Moreover, amid these geopolitical tensions, the Panamanian government is grappling with domestic issues, including a significant economic downturn and environmental risks threatening the canal's operations. The future of a large copper mine that was closed 18 months ago also looms over the administration, adding to the pressure faced by President Mulino.

In a bid to appease US concerns, Panama has increased efforts to manage the flow of migrants transiting through the Darién Gap, a treacherous 60-mile stretch of jungle that links Colombia to Panama. This move is part of a broader strategy to strengthen relations with the US, which has shifted focus to Central America.

Additionally, Panama’s comptroller is conducting a forensic audit of the concession held by CK Hutchison, following allegations of irregularities by local legislators. CK Hutchison has publicly denied that the criticisms from Trump influenced its decision to sell the ports, asserting that the deal is purely commercial. Meanwhile, on Friday, Deputy Secretary of State Christopher Landau engaged in discussions with Panama’s foreign minister, emphasizing the “importance” of the ongoing audit.

Orlando Pérez, a political science professor at the University of North Texas, noted that Hegseth's visit underscores the growing importance of US-Panama relations. He warned that if the forensic audit uncovers irregularities, it would likely lead to significant pressure on Panama’s regulators to take action against the port concessions, amplifying the already tense situation.