War that's breaking out in Panama? (5,3)

I believe the answer is:

straw hat

'panama?' is the definition.
('straw hat' can be a synonym of 'panama')

'war that's breaking out' is the wordplay.
'breaking out' indicates anagramming the letters.
'war'+'thats'='warthats'
'warthats' with letters rearranged gives 'STRAW-HAT'.

'in' is the link.

(Other definitions for straw hat that I've seen before include "Capital Investment?"" , "Panama" , "Boater" .)

I've seen this clue in The Guardian and The Globe and Mail.

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