Panama raises ship‑detention concerns with China
Panama’s president said the government formally raised worries with Chinese diplomats after a spike in detentions of Panama‑flagged vessels, while urging calm to avoid escalation. Reports say inspections of Panama‑flagged ships climbed in March and U.S. maritime authorities are monitoring the situation for its potential effect on global shipping. (cnnespanol.cnn.com; bairdmaritime.com)
In March, Chinese ports detained 92 ships flying Panama’s flag, and Panama’s government has now formally taken the issue to Chinese diplomats while President José Raúl Mulino says he wants the dispute cooled down, not widened. (bairdmaritime.com; pan.news.o-abroad.com) This is bigger than it sounds because a ship’s flag is its legal nationality at sea, and Panama runs the world’s largest ship registry, with more than 8,600 vessels and roughly 15% of global tonnage under its flag. (maritime-executive.com; panama-registry.com) So when China slows Panama-flagged ships, it is not just squeezing Panama-owned companies; it is touching a huge slice of world shipping, including vessels that carry cargo for the United States and Europe. The United States Federal Maritime Commission said Panama-flagged ships carry a meaningful share of United States containerized trade and that it is closely monitoring the situation. (fmc.gov) The trigger sits back in Panama, not in China. On January 30, 2026, Panama’s Supreme Court invalidated the legal framework behind Hong Kong-based CK Hutchison’s concession to run the Balboa and Cristóbal terminals at the two ends of the Panama Canal. (fmc.gov; seatrade-maritime.com) After the ruling was published on February 23, Panama moved to terminate the concessions and hand interim operations to APM Terminals, which is part of A.P. Moller-Maersk, and Terminal Investment Limited, which is linked to Mediterranean Shipping Company. (cnbc.com; maritime-executive.com) Panama’s foreign minister said this week that the jump in inspections and detentions in China came after that court decision and asked Beijing to respect Panama’s sovereign affairs. Reuters reported that Panama directly linked the shipping pressure to the ports ruling against CK Hutchison. (usnews.com; straitstimes.com) Chinese authorities have framed the actions as port state control, which is the routine safety and compliance inspection system ports use on foreign ships. The Federal Maritime Commission said the March surge went “far exceeding historical norms,” which is why Washington treated it as possible retaliation rather than normal enforcement. (fmc.gov; maritime-executive.com) United States Secretary of State Marco Rubio went further on April 2 and said the detentions raised serious concerns about using economic pressure to undermine the rule of law in Panama. The Associated Press reported Rubio accused China of “bullying” by detaining or holding up dozens of Panama-flagged ships. (usnews.com; apnews.com) Mulino is trying to keep that United States-China fight from turning Panama into the battlefield. On April 9, he said Panama had already raised the matter through diplomatic channels but did not want “a conflict with China” over the ship detentions. (bairdmaritime.com; msn.com) If the inspections stay elevated, the practical effect is simple: more waiting time in port, more uncertainty for shipowners choosing a flag, and more pressure on supply chains that already route a large share of cargo through canal-linked trade lanes. That is why a fight over two canal terminals in February has turned into a shipping story stretching from Panama City to Chinese ports in April. (fmc.gov; seatrade-maritime.com)
