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Hegseth is first US defense secretary to visit in decades

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Panama wrestles with US concerns about Chinese investment

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US handed waterway to Panama in 1999

(Adds Hegseth's tour of the canal, talk to troops, paragraphs

5, 16-17; Chinese embassy comments in paragraphs 23-24)

By Phil Stewart

PANAMA CITY, April 8 (Reuters) - The United States will

"take back" the Panama Canal from Chinese influence, U.S.

Defense Secretary Pete Hegseth said on Tuesday during a visit to

the Central American nation.

After talks with Panama's government, Hegseth vowed to

deepen security cooperation with Panamanian security forces and

said China would not be allowed to "weaponize" the canal by

using Chinese firms' commercial relationships for espionage.

"Together, we will take back the Panama Canal from China's

influence," Hegseth said, speaking at a pier renovated with U.S.

assistance in Panama City.

"China did not build this canal. China does not operate this

canal and China will not weaponize this canal. Together with

Panama in the lead, we will keep the canal secure and available

for all nations."

More than 40% of U.S. container traffic, valued at roughly

$270 billion a year, goes through the Panama Canal, accounting

for more than two-thirds of vessels passing each day through the

world's second-busiest interoceanic waterway.

Hegseth, the first U.S. defense secretary in decades to

visit Panama, flew over the canal in a Black Hawk helicopter

after meeting U.S. troops and Panamanian security forces. He

also toured the Miraflores lock, waving to sailors passing

through on a container ship.

His language appeared fine-tuned, talking tough but

offering some assurances to Panamanians still unsettled by

Trump's threats to reclaim the canal.

While Hegseth spoke about removing Chinese influence, Trump

has spoken in broader terms and not ruled out using military

force.

Hegseth's trip follows reports that the Trump administration

has requested options from the U.S. military to ensure access to

the canal, which the United States built more than a century ago

and handed over to Panama in 1999.

Trump has complained that was a bad deal for the United

States.

Given Trump's tough rhetoric, the stakes were high for

Hegseth's visit.

"On the whole, this hasn't been a winning issue for the

United States in terms of public diplomacy in Panama," said Ryan

Berg, director of the Americas Program at the Center for

Strategic and International Studies.

Still, current and former U.S. officials and experts say the

United States has found a willing partner in tackling Chinese

influence in Panama's President Jose Raul Mulino, whom Hegseth

met earlier on Tuesday.

In February, Mulino announced Panama's formal move to exit

China's Belt and Road Initiative and he has aided Trump's

crackdown on migrants.

He has accepted deportation flights of non-Panamanians and

worked to stem migration from South America by those crossing

through his country's dangerous Darien jungle.

Hegseth praised Mulino, saying his government understood the

threat from China, and his remarks about Panama being in the

lead on addressing the canal's security concerns appeared to be

a nod to Panamanian sensitivities.

During his visits to bases, which once had names including

Fort Sherman and Rodman Naval Station before the U.S. exit,

Hegseth spoke about the canal as "key terrain" and held out

hope for more frequent engagements by U.S. troops, including by

revitalizing a jungle survival training center.

"In reality or in perception, the communist Chinese have

had designs on more control of this canal, and to that we say:

Not on our watch," Hegseth told U.S. troops and Panamanian

security forces. "We will grow our partnership even more."

Hegseth, a U.S. military veteran and former Fox News host,

has enthusiastically backed Trump's southern-focused security

agenda, by means such as dispatching U.S. troops to the U.S.

border with Mexico, offering space at a base at Guantanamo Bay,

Cuba to detain migrants, and military aircraft for deportation

flights.

U.S. SECURITY CONCERNS

Trump has falsely claimed that China is operating the canal,

something even Hegseth said was not true on Tuesday, and that

Chinese soldiers are present.

But experts acknowledge U.S. security concerns, particularly

regarding espionage, with an expansive Chinese commercial

presence in Panama that also includes plans by Chinese firms to

build a bridge over the canal.

"China has never been involved in the management and

operation of the Panama Canal, nor has it ever interfered in the

affairs of the canal," said a statement by the Chinese Embassy

in Panama.

"The only time in history the canal has been cut off was

because of a U.S. invasion. Who is truly safeguarding the

canal's neutrality and prosperity? Who keeps clamouring to 'take

back' the canal? Who is the real threat to it?"

Last month, Trump celebrated a deal led by U.S. firm

BlackRock to buy most of the $22.8-billion ports business of

Hong Kong conglomerate CK Hutchison ( CKHUF ), including its ports on

either end of the Panama Canal.

Trump said the purchase was an example of how the United

States was "reclaiming" the canal.

But China has criticized it, with the market regulator

saying it will carry out an antitrust review of the deal.

Current and former U.S. officials say the Panama Canal would

be critical for the passage of U.S. warships during any future

conflict in Asia, since Navy vessels would transit from the

Atlantic to the Pacific to support the war effort.

Even without blocking the canal, China could keep tabs on

vessels passing through it.

Still, John Feeley, who was U.S. ambassador to Panama from

2015 to 2018, disputed the Trump administration's assertion that

China's presence in Panama was a violation of the U.S.-Panama

treaty.

"What's not legitimate about the way Trump has gone about

this is the bullying tactic that he's used, which is to claim

that there has been a violation of the neutrality treaty. There

hasn't been," Feeley said.

Mulino has defended Panama's administration of the canal,

saying it has been handled responsibly for world trade,

including that of the United States, and that it "is, and will

continue to be, Panamanian."