The Port of Balboa at the Pacific entrance of the Panama Canal. (Walter Hurtado/Bloomberg)
April 2, 2026 3:32 PM, EDT
Key Takeaways:
- The U.S. accused China of harassing and detaining Panama-flagged ships after Panama’s Supreme Court voided CK Hutchison port contracts near the Panama Canal.
- Officials said the allegations heighten U.S.-China tensions before President Donald Trump’s May Beijing visit and risk global supply chains through delays and higher costs.
- China denied the claims while CK Hutchison filed international arbitration seeking at least $2 billion as scrutiny of Panama Canal operations continues.
The U.S. accused China of harassing and detaining Panama-flagged ships after the Central American nation struck down contracts with a Hong Kong conglomerate operating ports on both sides of the Panama Canal.
The allegations, first raised by the U.S. Federal Maritime Commission and amplified by Secretary of State Marco Rubio on April 2, add another point of tension between the U.S. and China ahead of President Donald Trump’s scheduled visit to Beijing in May.
“China’s recent actions against Panama-flagged vessels raise serious concerns about the use of economic tools to undermine the rule of law in Panama, a sovereign nation and vital partner for global commerce,” Rubio said in a statement.
“Detentions, delays or other impediments to the movement of vessels undermine the stability of global supply chains, increase costs for businesses and consumers, and erode confidence in the international trading system,” Rubio added.
Panama’s Supreme Court ruled in January that the contract granted to CK Hutchison Holdings Ltd. to operate two ports near the Panama Canal was unconstitutional, delivering a win to Trump’s efforts to rein in China’s control of strategic infrastructure in Latin America.
The Port of Balboa at the Pacific entrance of the Panama Canal.
The canal has been in focus since December 2024, when Trump — then a month away from returning to office — began threatening to “take back” the waterway from Panama, citing unfair fees. He also falsely claimed the canal was being operated by China, setting off tensions between the geopolitical powers.
China has denied U.S. allegations related to the detention of Panama-flagged ships.
“The US’s repeated wrongful allegations only reveal its attempt to take control of the canal,” Chinese Foreign Ministry spokesman Lin Jian said last week.
CK Hutchison last month filed international arbitration against Panama seeking at least $2 billion in damages and alleging an “illegal state takeover” of the ports.
