Geopolitical friction between the United States and China has intensified in recent weeks, sparked by a high-stakes dispute over two strategically critical ports along the Panama Canal that has drawn Washington directly into a growing confrontation in the Western Hemisphere. The conflict traces back to January, when Panama’s Supreme Court issued a landmark ruling deeming the operating concession for the Balboa and Cristóbal terminals — held by a subsidiary of Hong Kong-based conglomerate CK Hutchison Holdings — unconstitutional. Following the ruling, Panama’s government moved to seize control of the two ports, triggering a sharp response from Beijing, which has pledged to protect the legal interests of its domestic companies.
In a public statement posted to social media Thursday, U.S. Secretary of State Marco Rubio leveled serious allegations against Beijing, claiming China had engaged in coercive “bullying” by disproportionately detaining Panama-flagged commercial vessels at Chinese ports in retaliation for the port seizure. Rubio argued that China’s actions, which saw detentions last between one and 10 days before vessels were released, undermine lawful global trade, destabilize critical international supply chains, raise operational costs for shippers, and erode trust in the rules-based global trading system. “The United States stands with Panama against any retaliatory actions against its sovereignty and will always support our partners in the face of bullying,” Rubio said.
Data compiled by the Tokyo MOU, a regional port state control coordination body made up of 22 maritime authorities across the Asia-Pacific, appears to show a sharp upward spike in Panama-flagged vessel detentions at Chinese ports in March. Of the 124 total ships detained for inspection that month, 92 — nearly 75 percent — sailed under Panama’s flag. That marks a dramatic jump from earlier in the year: in February, Panama-flagged vessels accounted for just over 40 percent of detained ships (19 out of 45 total), and in January that share stood at just over 30 percent (23 out of 71).
China has forcefully rejected the U.S. accusations, with Chinese Embassy Washington spokesperson Liu Pengyu arguing that repeated baseless claims from the U.S. only expose Washington’s own ambition to seize control of the Panama Canal. Liu did not directly address the recorded uptick in detentions in his public statement.
This dispute is the latest flashpoint in a broader, long-running rivalry between Washington and Beijing for influence in Latin America and the Caribbean. The Trump administration has made curbing China’s growing economic and diplomatic sway in the Western Hemisphere a core foreign policy priority, a pledge Donald Trump first articulated during his initial presidential campaign, when he openly discussed the possibility of the U.S. retaking control of the strategically vital Panama Canal. The administration has ramped up U.S. engagement in the region more aggressively than any U.S. administration in decades, highlighted by the military raid that captured Venezuelan leader Nicolás Maduro in January.
U.S. federal regulators have already begun monitoring the situation closely. Laura DiBella, chair of the Washington-based Federal Maritime Commission, confirmed the agency has been tracking detentions of Panama-flagged vessels in Chinese ports, and echoed Rubio’s criticism of Beijing’s actions. “Secretary Rubio’s statement highlights the disruptive effects of the government of China’s actions against Panama-flagged vessels,” DiBella said, adding that the commission “is not aware of any other country in recent history conducting vessel safety inspections and detentions in a punitive manner.” DiBella also revealed that China’s Ministry of Transport had summoned senior representatives from Danish shipping giant A.P. Moller-Maersk to Beijing for high-level talks, after Panama announced Maersk’s subsidiary APM Terminals would take temporary control of the two seized canal ports while a new long-term operating concession is awarded.
Panama’s government has sought to de-escalate tensions, downplaying the geopolitical implications of the rising detentions. Panamanian officials have not yet responded to requests for comment on Rubio’s recent allegations, and have previously rejected claims that the detentions are tied to the canal port dispute between Beijing and Panama. In March, Panamanian Foreign Minister Javier Martínez acknowledged the increase in detentions but framed the checks as standard routine maritime safety procedures, noting that vessel detentions for inspection occur at ports across the world, regardless of a ship’s flag. “We want to maintain a respectful relationship with China,” Martínez added. Beijing has previously stated it would “take all measures necessary to firmly protect the legitimate and lawful rights and interests of Chinese companies” following the supreme court ruling that invalidated CK Hutchison’s concession.
For Panama, a global leader in international ship registration that generates roughly $100 million annually in revenue from its flag registry, the dispute carries significant economic risks. José Digeronimo, former president of the Panama Maritime Chamber, warned that widespread punitive actions against Panama-flagged vessels could cause lasting damage to the country’s flagship maritime industry. Digeronimo compared ship registration to a shipowner choosing a travel passport, noting that operators choose registries that allow unimpeded access to the largest number of global ports. If China, the world’s largest exporter, begins imposing restrictions on vessels using the Panama flag, Digeronimo argued, shipowners will rapidly abandon the registry to avoid delays, threatening a critical source of government revenue for Panama.