It is warping the neutrality which protects the country’s canal

Published on: Aug 25, 2026, 18:27:10 IST

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SPEEDBOATS INTERCEPT a suspicious ship near the entrance to the Panama Canal. Troops board it and bundle the bad guys off. On the Caribbean coast special forces launch an assault on a rebel base. On the outskirts of Panama City, the capital, Chinook and Black Hawk helicopters buzz overhead. From August 3rd to the 13th, Panamanians witnessed a display of military prowess not seen in the country for almost two decades.

The occasion was “Panamax”, a multinational military exercise led by the United States to practise defending against possible threats to the Panama Canal. Held roughly every two years since 2003, for the past 13 it has taken the form of a simulation run from bases in Texas and Florida. This year it returned to Panama. Over 1,700 troops, mostly American but supported by soldiers from 17 (mostly Latin American) countries, engaged in “kinetic operations” across the country.

“I’ve no issue with tabletop exercises but you can’t replicate this,” said Pete Hegseth, the secretary of war, dressed in a sweat-soaked olive green t-shirt. The canal, he said, is “a key piece of terrain. We’ve got more troops here in partnership with Panama than we’ve had in a very long time.”

The United States has taken a renewed interest in the western hemisphere since Donald Trump took office for the second time. It has intervened militarily in Venezuela, run an economic-pressure campaign against the Cuban regime, bullied Canada and demanded control of Greenland. And Mr Trump has made repeated threats to take control of the Panama Canal. For Southcom, the US Joint Command focused on Latin America, “ensuring unfettered US access to the Panama Canal is a top priority.” But American military expansionism does not sit comfortably with the treaties that govern the canal. And its effectiveness is far from guaranteed.

Mr Hegseth was speaking at Fort Sherman, one of three American-Panamanian joint training schools he announced during his previous trip to the country in April 2025. In the second half of the 20th century hundreds of thousands of troops undertook gruelling jungle-warfare training at Fort Sherman, many of them in advance of being sent to Vietnam. “Green Hell” was closed in 1999, along with 13 other American military installations, as a condition of the 1977 Canal Neutrality Treaty, which forbade the existence of foreign military installations. The Panamanian government says the new incarnation of “Jungle School” does not represent a foreign military base. Opposition politicians call its reopening a “camouflaged invasion”.

Panama’s constitution bars the country from having an army, but since coming to power in 2024 president José Raúl Mulino has beefed up Senafront, the border-control force, and Senan, the naval and air service. Last year Panama agreed to buy four Brazilian fighter planes. In April it received the first of an order of surveillance drones and interceptor boats from the United States. Together with port-scanning and cybersecurity equipment, the United States has given technology worth more than $174m to the security forces, according to Mr Mulino. In August the government launched a new joint command of Panamanian security forces, funded by revenue from the canal, and dedicated to the defence of the waterway and its hydrographic basin.

Panamax was also an opportunity for the Latin American members of the Americas Counter-Cartel Coalition, formerly known as the “Shield of The Americas”, to meet. Mr Hegseth said that Colombia, along with Honduras and Guatemala, had agreed to allow joint American military operations in their territory “to bring the fight to the [designated terrorist organisations] on land.” (The Guatemalan government denies that it has agreed.)

With Colombia’s new president, Abelardo de la Espriella, promising an aggressive campaign against criminal groups, Panama is preparing to deal with the spillover. On August 15th Senafront sent over 700 special-forces troops to the country’s southern border in an effort to stop gangsters entering through the heavily forested Darién Gap, which separates the two countries. “The canal’s enemy is narcotrafficking, and no one else,” said Mr Mulino.

That is not the position of the United States. The Trump administration believes that China, not drug gangs, poses the most serious threat to the canal. It wants to drive Chinese activity away from all the critical infrastructure it can in Latin America. Last year the Trump administration pushed Panama to remove Chinese operators from the ports at each end of the canal. Such “dual-use infrastructure” could be used for “intelligence gathering, cyber vulnerability, or logistical denial during global contingencies”, according to Southcom. Mr Hegseth views Panama as part of “Greater North America” and part of the “immediate security perimeter”.

“The Panama Canal is probably the most important infrastructure in the western hemisphere,” says Kevin Cabrera, the American ambassador to Panama. “If you wanted to interrupt our commerce, the Panama Canal is the way to mess with that.” Military co-ordination between the United States and Panama is crucial to defending the waterway, he says.

But restarting Jungle School does little address these concerns. Troops cannot stop spying or cyberattacks by other states, and would be needed in great numbers to prevent drone attacks or sabotage by terrorists.

Instead, increased American meddling increases the risks to the canal. Panamanian schoolchildren are taught that their country’s neutrality is the canal’s best defence, while its openness to all vessels “in times of peace and in times of war” has been the key to its rising role in world trade. Rodrigo Noriega, a local political analyst, says Mr Trump’s mercantilism threatens this neutrality, and that the chances of the canal being targeted are growing. Mr Cabrera dismisses this. “State and non-state actors don’t care about the rule of law. They don’t care about treaties,” he says.

Panama’s diplomats still think it matters. Over the past year they have renewed efforts to bolster signatories to the Neutrality Treaty. Austria, Belgium, Brazil, Portugal and Switzerland have signed. Invitations have been extended to Japan, India and 12 other countries. Neutrality, Mr Noriega notes, offers Panama protection not just from physical attacks on its canal, but potentially from Mr Trump’s bullying.

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