Panama spent the bulk of the match defending but pounced on a giveaway by the Americans before substitute forward Waterman sent a shot from the right side of the area to the bottom left corner late in stoppage-time.
Up next for Panama in Sunday’s final is Mexico, who beat Canada 2-0 in California thanks to Fulham forward Raul Jimenez’s brace, while the US will face Canada in the third-place game.
Canada struggled to match the intensity of Mexico, who pounced early with Jimenez scoring inside the first minute after Roberto Alvarado’s shot bounced off a defender and landed perfectly for him to fire home from the centre of the box.
Bayern Munich defender Alphonso Davies came closest for Canada in the first half before Mexico sealed victory in the 75th minute when Jimenez netted from a freekick following a foul on Santiago Gimenez by Stephen Eustaquio.
For the US, their latest loss to Panama is a massive blow as their only chance to collect silverware before co-hosting the 2026 World Cup with Mexico and Canada now rests with the June 14-July 6 Concacaf Gold Cup.
The US came into the game hoping to avenge a loss to Panama at last year’s Copa America where the hosts failed to reach the knockout stage, a humiliating result that led to the firing of head coach Gregg Berhalter.
“We are the US. You cannot win with your shirt, or you cannot win if you play here, there or I don’t know,” US manager Mauricio Pochettino said after the game.
“You need to show, and you need to come here and be better and suffer and win the duels and work hard. If not, it’s not going to be enough.”
After a somewhat tentative start today, the US briefly threatened Panama, nearly scoring twice, with another chance ruled offside just past the midway point of a scoreless first half.
Josh Sargent nearly scored in the 19th minute when he broke free in front of the Panama goal, but his shot hit a defender and then the post before being cleared.
Moments later, Weston McKennie’s header from the back post off a brilliant Timothy Weah cross was saved by Panama goalkeeper Orlando Mosquera.
Sargent found the net again, but Weah was offside in the build-up, and the goal was ruled out.
The US had several chances in the latter portion of the game as the toll of defending all night seemed to sap the Panama players’ strength and left them unable to generate much in the way of an attack until the late turnover.
The US remain the only team to win the Concacaf Nations League – which launched in 2019 and is modelled after its Uefa counterpart – having triumphed in 2021, 2023 and 2024.