The Hay–Bunau-Varilla Treaty was a pivotal agreement between the United States and Panama, signed on November 18, 1903. The treaty followed the U.S. support of Panama's independence from Colombia, which was partly motivated by the desire to construct a canal across the Isthmus of Panama. The treaty granted the U.S. exclusive rights over a 10-mile-wide strip of land, known as the Canal Zone, facilitating the construction and control of what would become the Panama Canal.

Philippe Bunau-Varilla, a French engineer and key figure in the treaty negotiations, played a crucial role in convincing U.S. officials of the strategic importance of the canal. The treaty stipulated that the U.S. would pay Panama $10 million upfront and an annual rent for the use of the land. The Panama Canal, once completed, would revolutionize global trade, significantly reducing travel time for ships between the Atlantic and Pacific Oceans. This shift in maritime logistics had lasting implications for commerce and military strategy.

The agreement was ratified by the U.S. Senate, but it was met with mixed reactions in Panama, where many felt that it favored U.S. interests excessively over those of Panama. Despite these sentiments, the treaty laid the groundwork for the construction of the Panama Canal, which began in earnest soon thereafter. The canal was completed in 1914, serving as a vital conduit for international shipping and dramatically altering the economic landscape of the region and beyond.