U.S. Defense Secretary Holds Talks with Panamanian President:
"Agreement Reached on Security Interests"
Position Shifted Just Three Days After Rubio's Visit
From now on, U.S. government vessels will be exempt from tolls when passing through the Panama Canal. This comes after Panama took a step back following pressure from U.S. President Donald Trump, who mentioned reclaiming operational rights over the Panama Canal.
On February 5 (local time), the U.S. State Department announced via social media platform X (formerly Twitter), "U.S. government vessels can now transit the Panama Canal without paying tolls," adding, "The U.S. government will be able to save millions of dollars annually."
On the same day, the U.S. Department of Defense stated, "Secretary of Defense Pete Hegseth spoke with Panamanian President Jose Raul Mulino," and "they agreed on the strong relationship shared by the United States and Panama, as well as on many security interests, including the protection of the Panama Canal." The department further noted, "Secretary Hegseth and President Mulino agreed to expand cooperation between the U.S. and Panamanian militaries and emphasized the broad and growing partnership." The statement added, "President Mulino welcomed Secretary Hegseth's visit, saying it would help advance the close relationship between the two countries and jointly defend the canal against external threats."
President Mulino had previously taken a firm stance, asserting that control and operation of the Panama Canal were matters of national sovereignty. However, just three days after U.S. Secretary of State Marco Rubio personally visited Panama and conveyed President Trump's intentions on February 2, he changed his position.
President Mulino also announced his intention to terminate Panama's Belt and Road Initiative agreements with China ahead of schedule. The previous day, Bloomberg reported that Panamanian authorities were considering canceling a contract with a Hong Kong-based company operating a port near the Panama Canal. However, it appears that Panama ultimately retreated under U.S. pressure.
According to The Wall Street Journal (WSJ), the two countries have agreed to privately discuss whether to grant U.S. Navy vessels free passage. Sources familiar with the negotiations said the State Department's announcement was made before an official agreement was reached, leaving Panamanian officials perplexed.
The United States built the canal under a treaty with Panama and managed and controlled it for more than 80 years before transferring operational rights to Panama in 1999, on the condition that permanent neutrality would be maintained. However, since taking office, President Trump has repeatedly declared his intention to reclaim the Panama Canal. In particular, he argued that granting two port operation rights to Hong Kong-based companies amounted to China controlling the Panama Canal, claiming this constituted a violation of the 1999 treaty between the United States and Panama.
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