Oddly enough, the Panama hat is not from Panama.  It is actually made in Ecuador.  So why are they called Panama hats?  There are various suggestions, however, the incident that really made the name stick was when US President Roosevelt had his photograph taken while visiting the site of the Panama Canal construction in 1906 (see image below).  He was wearing a hat in the same style as the construction workers, a hat of close weave renowned for protection from the sun, and unbeknownst to most, sourced from Ecuador.  The photo referred to the Panama hat....and the rest is history.
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