The dispute put Panama’s canal-linked ports and shipping registry into the center of a widening U.S.-China clash, with Washington arguing that China’s port inspections have become a retaliatory pressure point and Beijing rejecting the characterization. Speaking as U.S. President Donald Trump has repeatedly highlighted the Panama Canal’s strategic importance, Secretary of State Marco Rubio accused China on Thursday of “bullying” by detaining or impeding Panama-flagged vessels, according to his statement on social media.
Rubio’s argument focused on inspections and delays in Chinese ports. He said China’s decision to detain or otherwise impede Panama-flagged ships engaged in “lawful trade” destabilizes supply chains, raises costs, and erodes confidence in the global trading system. He added that the U.S. “stands with Panama against any retaliatory actions against its sovereignty” and said it would “always support our partners” in the face of what he described as bullying.
To support the accusation, Rubio pointed to public data from Tokyo MOU, a regional port-state control organization with 22 member authorities in the Asia-Pacific region. The data, as described in the report, said that in March 124 ships were detained in Chinese ports for inspection, and 92 of them were Panama-flagged—nearly 75%. The report said the Panama-flagged ships were typically held for a few days, with detention periods ranging from as short as one day to as long as 10 days.
The report also described an increase from earlier months. It said Panama-flagged vessels made up 19 of 45 ships—more than 40%—held in February and 23 of 71 ships—over 30%—held in January. Rubio’s “bullying” framing came as Panama is caught in the broader rivalry between the U.S. and China over the canal, after Trump accused Beijing last year of running the Panama Canal and has talked about retaking it since his campaign.
China denied the allegations. In response, Liu Pengyu, a spokesperson for the Chinese embassy in Washington, said in a statement that America’s “repeated wrongful allegations only reveal its attempt to take control of the canal,” and the report said he did not address the uptick in Panama-flagged ships being held in Chinese ports.
The episode is unfolding against legal and commercial changes in Panama’s canal terminal concessions. In January, Panama’s supreme court ruled that a concession held by a subsidiary of Hong Kong’s CK Hutchison Holdings over the Balboa and Cristóbal terminals was unconstitutional. Panama’s government has said APM Terminals, a subsidiary of Danish shipping and industrial group A.P. Moller-Maersk, would temporarily assume administration of the terminals while a new contract is awarded, and the report said DiBella added that the Chinese Ministry of Transport had summoned Maersk to Beijing for high-level discussions.
At the U.S. agency level, the report said the Federal Maritime Commission has been tracking Panama-flagged vessels that are being detained or held up in Chinese ports. DiBella, the commission’s chair, said Rubio’s statement highlights the disruptive effects of China’s actions against Panama-flagged vessels and said the commission was “not aware of any other country in recent history conducting vessel safety inspections and detentions in a punitive manner.”
Panama has sought to limit the geopolitical framing of the detentions. Officials did not respond to requests for comment about Rubio’s comments, but the report said Panama previously denied that the detentions had to do with disputes between China and Panama over the canal. In March, Panama’s foreign minister Javier Martínez recognized an increase in detentions but said he believed they were “part of routine maritime industry practices,” adding that detentions also occur in other ports and to other flags. He said, “We want to maintain a respectful relationship with China.”
Panama’s vulnerability as a ship-registration hub also figured in the discussion. José Digeronimo, a former president of the Panama Maritime Chamber, said actions involving ships could have a “huge impact” on Panama, which he said is a world leader in ship registries that generate about $100 million for the government each year. He compared the registries to passport choices for shipowners, and argued that harassment by Chinese authorities could jeopardize their willingness to use the Panamanian flag.
China has previously said it would protect its firms’ interests in the terminal dispute. After Panama’s supreme court ruling, Chinese Foreign Ministry spokesperson Guo Jiakun said China would “take all measures necessary to firmly protect the legitimate and lawful rights and interests of Chinese companies.”