Panama City, Panama - US Defense Secretary Pete Hegseth on Wednesday floated the idea of US troops returning to Panama to "secure" its strategically vital canal, a suggestion quickly shot down by the country's government.

During a visit to Panama, Hegseth suggested that "by invitation" the US could "revive" military bases or naval air stations and rotate deployments of US troops to an isthmus the US invaded 35 years ago.

He also said his country was seeking free passage through the canal for its Navy ships – which US President Donald Trump had said were "severely overcharged and not treated fairly in any way, shape or form."

Since coming to power in January, Trump has repeatedly claimed that China has too much influence over the canal, which handles about 40% of US container traffic and 5% of world trade.

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His administration has vowed to "take back" control of the interoceanic waterway that the US funded, built, and controlled until 1999.

Hegseth on Wednesday suggested the slew of former US military bases that dot Panama could again be used to host US troops.

He said a deal signed with Panama this week was an "opportunity to revive, whether it's the military base, naval air station, locations where US troops can work with Panamanian troops to enhance capabilities and cooperate in a rotational way."

Hegseth cited the possibility of "joint exercises" but the mention of a "rotational" force is likely to raise the hackles of Panamanians, for whom sole ownership of the canal is a source of intense national pride.

The US has long participated in military exercises in Panama.

But a longer-term rotational force – like the one the US maintains in Darwin, Australia – is politically toxic for Panama's center-right leader Jose Raul Mulino.

His government quickly slapped down the idea.

"Panama made clear, through President [Jose Raul] Mulino that we cannot accept military bases or defense sites," said Panama security minister Frank Abrego in a joint public appearance with Hegseth.