US warships could soon enjoy free and priority use of the Panama Canal, but there's still a long way to go before tensions in one of the world's most important trade passages are resolved.

Panama's strategic value — to the US and many other shipping nations — is thanks to its 51-mile (82-kilometer) canal, which allows ships to easily pass between the Pacific and Atlantic oceans without needing to unload cargo or sail around South America.

The canal has been thrust into the limelight since the return of Donald Trump as US president in January. Trump is opposed to China's growing influence in the region, and has repeatedly spoken about "reclaiming" the canal — which the US ceded to Panama in 1999. He hasn't ruled out a military invasion to achieve his goal.

Amid tensions over Trump's rhetoric, US Defense Secretary Pete Hegseth met with Panamanian President Jose Raul Mulino this week to shore up relations. A joint statement released by the pair on Wednesday struck a friendly tone, but sticking points remain.

Mulino has already worked to appease the Trump administration on the subject of China.

After a visit by US Secretary of State Marco Rubio in February Panama confirmed it would exit China's Belt and Road initiative, which is building major infrastructure projects including ports and airports around the world.

Separately, Mulino's administration has pressured Chinese conglomerates that own Panamanian ports to exit the country.

On Wednesday, the first point in the Hegseth-Mulino statement directly addressed another key Trump talking point: tolls. Trump has consistently labelled the canal usage fees paid by the........

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