The United States is intensifying diplomatic and military manoeuvres to challenge Panama's sovereignty over the strategically crucial Panama Canal, with Washington developing contingency plans that range from increased military cooperation to potential forceful intervention.

NBC News reported on March 13 that the US Southern Command has prepared draft strategies examining options for engagement, including a controversial scenario of potential military seizure of the interoceanic waterway. Admiral Alvin Holsey, head of the Southern Command, has reportedly presented these strategies to Defence Secretary Pete Hegseth.

The diplomatic tension stems from US allegations of Chinese influence in the canal's management, a claim vehemently denied by Panamanian authorities, and purported "exorbitant fees" charged on US vessels. US President Donald Trump vowed to "take back" the canal during his inauguration address on January 20. Since then, Secretary of State Marco Rubio has ramped up rhetoric against Panama, warning President José Raúl Mulino that Washington would "take necessary measures" if the country did not address perceived Chinese involvement.

Panamanian Foreign Minister Javier Martínez-Acha has firmly stated that "the Canal belongs to Panamanians and will continue to do so". He emphasised the country's commitment to a strategy of "quiet diplomacy" while maintaining the Neutrality Treaty that governs the canal's operations.

“I don’t feel that there are tensions… Our relationship with our main ally is complex but good… We are coordinating many things in terms of security, cybersecurity, and migration,” the Panamanian diplomat said.

The Canal, which handles about 5% of global maritime trade volume, was built by the US in the 1914 employing nearly 100,000 contract workers, mostly from the Caribbean. It was eventually handed over to Panama in 1999, enforcing a treaty signed in 1977 by former president Jimmy Carter.

The current escalation is rooted in a complex historical context. The United States has intervened in Panama nearly a dozen times since the late 19th century, with the most significant military operation occurring in 1989 when over 25,000 troops were deployed to overthrow dictator Manuel Antonio Noriega.

President Mulino has shown a delicate balancing act, aligning with Washington by accepting migrant deportations, quitting Beijing’s Belt and Road initiative and facilitating a strategic port acquisition from a Hong Kong-based conglomerate by American consortium BlackRock. However, he has also pushed back against direct US demands, stating that the Canal "is not in the process of being reclaimed".

Legal experts consulted by local media argue that Panama should more actively utilise international legal mechanisms. Julio Linares, an international law specialist, criticised the current approach as a "slow, do-nothing" strategy that potentially compromises national interests.

In a similar vein, University of Panama international relations expert Jones Cooper argued, as quoted by La Estrella, that Panama could leverage UN and OAS charters to legally bolster its defence strategy against potential US intervention.

“What does the ambassador in Washington and the OAS say? Nothing. Panama needs to internationalise the Panamanian cause,” Cooper said.