Panamanian President Jose Raul Mulino watches as US Secretary of Defence Pete Hegseth signs a bilateral agreement, in Panama City, 9 April 2025. Credit line: Franco Brana / AFP
The Pentagon and the Panamanian Ministry of Defence have signed a new three-year bilateral agreement that allows the US military to deploy near the strategic Panama Canal. The agreement was signed on Thursday by Pentagon Chief Pete Hagel and Panamanian Defence Minister Frank Abrego, Reuters reports .
According to the agreement, US troops and contractors from private US military companies will be able to use the designated areas and infrastructure for joint training, humanitarian operations and military exercises. However, the agreement does not provide for the establishment of permanent US bases in Panama.
The infrastructure will remain in the ownership of the Panamanian state, but will be accessible to both Panama and the United States. The agreement provoked a mixed reaction: during a press conference in Panama City, Hughes said that the joint defence exercises were an opportunity to “restart the US military presence” in the region. This statement caused alarm among some of Panama’s political elite.
Tensions over the canal have been rising since before Donald Trump returned to office in January 2025. The former and current US president has stated his intention to “regain control” of the canal, which was built by the United States and transferred to Panama only in 1999. The facility is strategically important for global trade – more than 5% of global maritime cargo traffic passes through the Panama Canal, with the US and China remaining the main users.
