Context:

Marco Rubio accused China of bullying after dozens of Panama-flagged vessels were detained or held briefly in Chinese ports following Panama’s January move to seize control of two key canal terminals from a Hong Kong–based subsidiary. China denied the allegations, framing the action as a routine enforcement matter, while Washington ties it to a broader US–China contest over the canal and regional influence. Public data show a sharp rise in Panama-flagged detentions in March, with 92 of 124 ships inspected being Panama-flagged, signaling potential leverage against Panama’s registry economy. Panama seeks to minimize wider tensions, stressing ongoing commercial ties and stating the detentions may reflect standard maritime practices. The dispute highlights geopolitical frictions around control of the canal and its economic and strategic importance, with next steps likely involving diplomatic dialogue and monitoring of port actions.

Dive Deeper:

• Rubio characterized China’s actions as coercive, arguing that detaining Panama-flagged ships disrupts supply chains, increases costs, and undermines confidence in the global trading system.

• Data from Tokyo MOU show that in March, 92 of 124 ships detained in Chinese ports were Panama-flagged, with most held for a few days before release, marking a notable uptick from prior months.

• In January and February, Panama-flagged ships accounted for more than 30-40% of detentions, indicating a rising share in China’s port inspections compared with earlier periods.

• Panama’s Supreme Court ruled in January that the CK Hutchison Holdings concession over the Balboa and Cristóbal terminals was unconstitutional, intensifying tensions around canal control and terminal management.

• Panama’s government temporarily assigned terminal administration to APM Terminals (a Maersk subsidiary) while a new contract is sought, reflecting ongoing logistical and governance adjustments.

• Chinese officials publicly denied US accusations, with the embassy spokesperson dismissing them as wrongful and refraining from addressing the specific uptick in Panama-flagged detentions.

• Panama’s foreign minister emphasized a desire to maintain respectful relations with China, noting that detentions could be seen as routine industry practice and stressing the importance of preserving Panama’s ship registry—worth about $100 million annually.