By Ginika Igboke 

U.S. Secretary of State Marco Rubio has accused the Chinese government of using economic pressure tactics after dozens of Panama-flagged vessels were detained or delayed at Chinese ports, raising concerns about global trade disruptions and geopolitical tensions surrounding the Panama Canal.

“China’s decision to detain or otherwise impede Panama-flagged vessels engaged in lawful trade destabilizes supply chains, raises costs, and erodes confidence in the global trading system,” Rubio said in an April 2 statement on social media. He added that the United States stands with Panama against what he described as retaliatory actions that threaten its sovereignty.

Dispute Follows Panama Port Takeover

The tensions come after Panama moved earlier this year to take control of two key canal ports—Balboa and Cristóbal—from a subsidiary of CK Hutchison Holdings, a Hong Kong-based firm.

In January, Panama’s Supreme Court ruled that the company’s long-standing concession to operate the ports was unconstitutional. The decision followed an audit that identified alleged irregularities and questioned the legal foundation of the agreement.

After the ruling, Panama installed interim operators, including subsidiaries of major global shipping firms, under temporary 18-month contracts to maintain port operations.

CK Hutchison, which had managed the ports for nearly three decades, rejected the decision and launched international arbitration proceedings, seeking more than $2 billion in damages. The company argued that Panama’s move lacked legal justification and could undermine investor confidence and economic stability.

Surge in Ship Detentions Raises Alarm

U.S. regulators say the number of Panama-flagged ships detained in China has risen sharply in recent months.

According to data from regional maritime authorities, 92 out of 124 vessels detained for inspection in Chinese ports in March—nearly 75 percent—were registered under Panama’s flag. These ships were typically held for periods ranging from one to 10 days.

That marks a significant increase compared to earlier months. In February, 19 out of 45 detained vessels were Panama-flagged, while in January the figure stood at 23 out of 71.

The Federal Maritime Commission said it is closely monitoring the situation, warning that such actions could have serious implications for global shipping and U.S. trade interests.

Concerns Over “Punitive” Actions

FMC Chair Laura DiBella described the detentions as unusual, stating the commission is not aware of any recent precedent where vessel inspections were conducted in what appears to be a punitive manner.

She emphasized that Panama-flagged ships play a critical role in U.S. containerized trade, meaning prolonged delays or increased inspections could lead to higher costs and logistical challenges for American businesses.

U.S. officials have also raised concerns that China may be using regulatory measures as leverage in response to Panama’s decision to revoke the port concessions.

China Rejects Allegations

China has denied the accusations, with its embassy in Washington dismissing U.S. claims as politically motivated. Beijing has argued that it is protecting the legitimate interests of its companies and has criticized Panama’s court ruling as an act of bad faith.

Earlier statements from China’s Foreign Ministry indicated that the government would take necessary steps to defend Chinese business interests abroad.

Strategic Importance of the Panama Canal

The dispute highlights the geopolitical significance of the Panama Canal, a vital maritime corridor that handles roughly 5 percent of global trade.

The canal has long been a focal point of international influence. The United States originally built the waterway in the early 20th century and maintained control until formally transferring it to Panama in 1999 under treaties signed during the administration of Jimmy Carter.

More recently, U.S. President Donald Trump has accused China of exerting undue influence over canal operations, a claim Beijing denies.

Ongoing Tensions and Global Implications

The broader dispute also involves a stalled global deal in which CK Hutchison agreed to sell dozens of port assets—including those linked to the canal—to a consortium led by U.S. investment firm BlackRock. The transaction has faced delays amid escalating geopolitical tensions between Washington and Beijing.

Meanwhile, Panama has sought to balance its relationships, with its foreign minister acknowledging the rise in ship detentions but suggesting they may reflect routine maritime enforcement practices rather than targeted retaliation.

Despite those reassurances, U.S. officials continue to view the situation as a potential threat to international trade stability and regional sovereignty.

Rubio said the United States is prepared to deepen economic and security cooperation with Panama, signaling that Washington intends to remain actively engaged as the dispute unfolds.