Panama said on Wednesday the United States recognized its sovereignty over the Panama Canal, despite tough rhetoric from Washington, as the two nations announced agreements to deepen U.S. military training in the Central American nation.

U.S. Defense Secretary Peter Hegseth said on Wednesday he sees the Panama Canal as key terrain that Panama should secure together with the United States and not with China, adding it was important to protect it from "malign" influence.

Panama promotes itself “as the bridge of the world, heart of the universe” but lately the narrow Central American Isthmus and its namesake canal that joins the Atlantic to the Pacific have become the setting for a bitter clash between the world’s two preeminent economic superpowers.