China has detained nearly 70 Panamanian-flagged ships in March, US officials said, after Panama’s Supreme Court annulled contracts tied to port terminals on the Panama Canal. The move, the Federal Maritime Commission said, was far exceeding historical norms and came after a ruling that struck down decades-old agreements involving a subsidiary of Hong Kong-based CK Hutchison.
Bolivia, Costa Rica, Guyana, Paraguay, Trinidad and Tobago and the United States issued a joint statement on Tuesday backing Panama and accusing China of retaliating with targeted economic pressure. The six countries called it a blatant attempt to politicise maritime trade and infringe on the sovereignty of the nations of their hemisphere.
Washington has made the dispute a public test of its support for Panama, with Marco Rubio saying the United States was deeply concerned by China’s economic pressure and that “We stand in solidarity with Panama. Any attempts to undermine Panama’s sovereignty are a threat to us all.” China responded by accusing the United States of bullying and trying to smear its reputation in Latin America. It described the Panamanian Supreme Court ruling as “absurd” and “shameful.”
The conflict centers on the Balboa and Cristobal terminals on the Panama Canal, where Panama’s top court ruled in late January that the agreements allowing a CK Hutchison subsidiary to administer the ports were unconstitutional. The case landed at a moment when Donald Trump had already made the 49-mile waterway a political flashpoint, alleging in his January 2025 inaugural address that China was operating the canal and promising the United States would “take back” control.
Laura DiBella said Beijing’s detention of Panamanian ships had repercussions for both Panama and the US, warning that intensified inspections appeared to be carried out under informal directives and seemed intended to punish Panama after the transfer of Hutchison’s port assets. She said Panama-flagged ships carry a meaningful share of US containerised trade, which means the pressure could spill far beyond the dispute over the terminals themselves.
The strain has also reached the companies involved in the port changes. US officials allege China retaliated against shipping giants Maersk and the Mediterranean Shipping Company, whose subsidiaries were granted 18-month contracts to run the Balboa and Cristobal terminals after CK Hutchison was removed. Representatives of both companies were summoned by China’s Ministry of Transport for high-level discussions in March, while Chinese shipping giant COSCO has suspended operations at the Balboa terminal.
CK Hutchison is separately pursuing international arbitration against the government of Panama and seeking more than $2 billion in damages. The case leaves Panama caught between a court ruling at home, diplomatic pressure abroad and a shipping dispute that now reaches deep into US trade routes, with the canal at the center of a widening contest over control, commerce and sovereignty.