U.S. Secretary of Defense Pete Hegseth said that the nation of Panama agreed to allow warship passage through the canal after Chinese officials accused the U.S. of trying to use blackmail to further its interests.

Hegseth said that the two nations had signed a memorandum of understanding to allow U.S. warships to pass through the canal without paying a toll. The agreement for security cooperation also includes auxiliary vessels.

'Everyone knows who wants to control the Panama Canal.'

When asked about the accusation, Hegseth fired back at China.

“I don’t know anything about blackmail," he responded, "but I do know about strength, peace through strength, and deterrence.”

On Wednesday a Chinese official had more fiery rhetoric against the U.S. as a trade war escalated between President Donald Trump and the communist-governed nation.

“Everyone knows who wants to control the Panama Canal,” said ministry spokesperson Lin Jian to reporters. “The U.S. side should take a look in the mirror to see who really threatens the sovereignty, security, and development of other countries.”

Lin went on to demand that Washington “stop deliberately linking China to the canal issue to find excuses for the U.S.’s desire to control the Canal.”

Hegseth had vowed to take back control of the canal from a Hong Kong-based company that had planned to sell two ports in Panama as part of a deal to BlackRock, the U.S.-based investment company.

"To this end, the United States and Panama have done more in recent weeks to strengthen our defense and security cooperation than we have in decades," he said on Tuesday.

While the U.S. president backed down on most tariffs he imposed on various countries on Wednesday, he hit China with even higher tariffs after the country announced its own retaliatory tariffs.

"Based on the lack of respect that China has shown to the World’s Markets, I am hereby raising the Tariff charged to China by the United States of America to 125%, effective immediately," said Trump in a message on Truth Social.

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