Shortly after coming to office, President Donald Trump began suggesting that the United States should retake the Panama Canal decades after surrendering it.

Although Trump's comments initially caused controversy, Panama's president has since hailed the presence of additional U.S. troops as a way to deter China. 

U.S., Panama find common ground

According to The New Republic, that claim was put forward by Secretary of Defense Pete Hegseth at a White House meeting with the president this week.

"We’re taking back the canal. China’s had too much influence, Obama and others let them creep in. We along with Panama are pushing them out, Sir," Hegseth was quoted as telling Trump on Thursday.

HEGSETH: We're taking back the canal

TRUMP: We've moved a lot of troops to Panama pic.twitter.com/FJn00pca9P

— Aaron Rupar (@atrupar) April 10, 2025

The secretary of Defense then spoke of a recent trip to Panama which saw him meet with that country's leader, President José Raúl Mulino.

Hegseth recalled how Mulino voiced support for adding to American troop numbers, insisting that he wishes to get "the Communist Chinese out" of his country.

Panama seeks distance from China

That led Trump to remark, "We’ve moved a lot of troops to Panama, and...filled up some areas that we used to have, we didn’t have any longer, but we have them now, and I think it’s in very good control, right?"

Hegseth confirmed that U.S. forces have indeed strengthened their position within the Central American nation, stating, "Yes, sir."

What's more, The New Republic pointed out how Panama has taken steps in recent months to put distance between itself and the Chinese regime.

An example of that came in February when the New York Post reported that the country had opted not to renew its Chinese "Belt and Road" trade and development pact.

Audit reveals irregularities

Mulino's administration also carried out a financial audit of Panama Ports Company, which controls ports on both sides of the Panama Canal and is a subsidiary of the Hong Kong-based firm CK Hutchison Holdings.

The Associated Press noted that the results of this audit were published earlier in the week, and it showed multiple business irregularities.

Specifically, Comptroller-General Anel Flores alleged that payment defaults, accounting errors, as well as the operation of "shadow" companies had caused Panama to lose roughly $300 million in revenue.