Recently, U.S. Secretary of State Marco Rubio expressed grave concern over the Chinese Communist Party’s actions in Panama following a court ruling that stripped the Hutchison Group of its operating rights at the ports in the Panama Canal. The Chinese government has started seizing ships flying the Panamanian flag in mass quantities, prompting widespread alarm.
Rubio’s statement underscored people’s serious concerns about the Chinese Communist Party’s use of economic means to undermine the rule of law in Panama. He emphasized that Panama is a sovereign nation and a critical partner in global trade. Any actions such as seizing, delaying, or hindering the passage of ships could disrupt the stability of the global supply chain, increase costs for businesses and consumers, and erode confidence in the international trade system.
The U.S. Federal Maritime Commission (FMC) issued a statement on March 26, closely monitoring developments at the Panama Canal ports and how China’s retaliatory measures following the Hong Kong court ruling on Hutchison Group may affect global shipping conditions.
Rubio explained that China’s actions against ships flying the Panamanian flag occurred following a recent ruling by the Supreme Court of Panama regarding the Balboa and Cristóbal ports. This sovereign ruling upholds transparency and the rule of law, holding private enterprises accountable for the public interest. It also affirms Panama as a reliable partner for international investments and business opportunities, with the U.S. standing firm with Panama and looking to strengthen economic and security cooperation.
In January, the Supreme Court of Panama invalidated the concession rights of CK Hutchison at the Balboa and Cristóbal ports due to irregularities discovered in an audit and questions raised about the legal basis of the concession.
A report from Lloyd’s List Intelligence revealed that with increased enforcement by China, the number of Panamanian-flagged ships detained in Chinese ports in March could reach 100. The latest data indicates that nearly 70 Panamanian-flagged ships have been detained in Chinese ports since March 8.
Laura DiBella, chairperson of the U.S. Federal Maritime Commission, noted that China’s detention of Panamanian-flagged ships far exceeds historical averages. She stated that China has significantly intensified its detention of Panamanian-flagged ships in Chinese ports under the pretext of port state control, exceeding previous practices.
DiBella said, “These heightened inspections appear to be retaliatory against Panama following the handover of assets at the ports post-court ruling.”
Considering the significant presence of Panamanian-flagged ships in U.S. container trade, these actions could have substantial commercial and strategic implications for the U.S. shipping industry.
DiBella added that the Federal Maritime Commission has the legal authority to investigate whether foreign government regulations or actions may harm U.S. trade.
Following the Supreme Court ruling, Panama’s government designated U.S. subsidiaries Maersk APM Terminals and Terminal Investment Limited, a subsidiary of MSC, as temporary operators at the ports under an 18-month agreement, as reported by the media.