Washington is expanding its military footprint around the Panama Canal as part of a wider hemispheric strategy linking critical infrastructure, organized crime and strategic competition. For governments, the question is how far that model spreads—and what it means for sovereignty, military access and regional alignment.
The US military in Panama is expanding significantly, placing one of the world’s most important trade arteries back at the center of Washington’s security strategy for the Western Hemisphere.
About 1,700 military and security personnel participated this month in PANAMAX 2026, involving forces from 19 countries. The exercise was conducted live in Panama for the first time in 14 years, while U.S. Army Western Hemisphere Command described its presence as its most significant physical footprint in the country in more than a decade.
Under a 2025 security agreement, Panama also authorized temporary deployments of U.S. personnel at three Panamanian-controlled facilities for training, exercises and other joint activities. The Pentagon described the arrangement as establishing a “rotational and joint presence” around the canal. Separately, the U.S. Army Corps of Engineers is facilitating construction of a multiuse facility at the Cristóbal Colón Naval Air Base.
The result is the most consequential expansion of U.S. military activity around the canal since Washington withdrew its forces from Panama at the end of 1999.
The Strategic Shift
The Trump administration increasingly views Panama through three overlapping priorities: securing the canal, confronting transnational criminal organizations and limiting Chinese influence over critical infrastructure in the hemisphere.
China does not control the Panama Canal, which remains operated by the autonomous Panama Canal Authority. U.S. concern has instead focused on Chinese commercial involvement in infrastructure surrounding the canal and across Latin America.
Until this year, a subsidiary of Hong Kong-based CK Hutchison operated port terminals at both canal entrances. Panama’s Supreme Court annulled those concessions in January, triggering arbitration claims worth billions of dollars.
The dispute highlights the broader strategic contest now taking shape around ports, logistics networks, telecommunications and other infrastructure that could carry economic or security value during a crisis.
That competition is increasingly explicit in U.S. defense planning. SOUTHCOM’s 2026 posture identifies denying adversaries strategic footholds in the hemisphere and preserving U.S. access to the canal as core priorities.
The Sovereignty Calculation
For Panama, deeper security cooperation carries historical and political risks.
The Torrijos-Carter treaties transferred full control of the canal to Panama at the end of 1999 and established its permanent neutrality. Panama’s government maintains that current arrangements remain consistent with that framework because the facilities stay under Panamanian control and U.S. deployments are temporary.
Critics inside Panama argue that an increasingly sustained rotational presence risks blurring that distinction.
That makes one question increasingly important for governments across the region: when does rotational military access begin to function strategically like a permanent presence?
The answer could shape how other governments assess future U.S. requests for access, joint facilities or expanded military cooperation.
A Wider Regional Pattern
Panama is not an isolated case.
The US military footprint in Panama is expanding alongside a wider campaign against transnational drug trafficking organizations and pursuing deeper security cooperation across Latin America and the Caribbean.
As of August 24, U.S. forces had conducted 67 maritime strikes in the campaign, killing 223 people since operations began in September 2025, according to the Associated Press. The administration describes the effort as an armed conflict against narcoterrorist organizations, while legal experts and critics continue to challenge its basis and scope.
Defense Secretary Pete Hegseth has also said U.S.-designated terrorist organizations operating inside partner countries could become targets of joint operations.
Panama’s President José Raúl Mulino has placed greater emphasis on transnational organized crime than on geopolitical alignment.
That distinction may become increasingly important. Governments may welcome greater U.S. support against criminal networks while remaining reluctant to have those partnerships folded into a broader contest with China.
What the US Military in Panama Signals
Panama offers an early view of how Washington’s emerging Western Hemisphere security strategy may operate.
Rather than relying exclusively on permanent overseas bases, the United States can expand access through rotational deployments, multinational exercises, infrastructure support and bilateral agreements while leaving facilities formally under host-country control.
That model gives Washington greater operational reach while reducing some of the political costs associated with traditional basing.
For governments, it also creates harder choices.
Closer cooperation can bring intelligence, surveillance, training and infrastructure benefits. But military access agreements can quickly become entangled with questions of sovereignty, domestic politics and strategic alignment between major powers.
What to Watch
The immediate question is not whether Washington is “taking back” the Panama Canal. It is not.
The more consequential issue is whether the growing U.S. presence around the canal remains a limited security arrangement or becomes a durable component of a broader hemispheric military architecture.
Watch for further U.S. access agreements elsewhere in Latin America and the Caribbean, additional infrastructure investments around the canal, changes in the frequency or scale of rotational deployments, and whether Washington increasingly links counter-cartel cooperation to strategic competition with China.
Panama may ultimately prove less important as an isolated deployment than as a model.
If Washington can expand its military reach through rotational access rather than permanent bases, the implications could extend across the hemisphere.
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