US, Latin America countries criticise China’s retaliation over Panama Canal

Bolivia, Costa Rica, Guyana, Paraguay, Trinidad and Tobago, and the United States have released a joint statement in support of Panama, while criticising Chinese economic retaliation, after a Hong Kong-based conglomerate lost a legal dispute over the management of ports on the Panama Canal.

Panama’s Supreme Court in late January annulled contracts that had allowed a subsidiary of Hong Kong’s CK Hutchison to administer the Balboa and Cristobal port terminals on the Panama Canal after deeming the decades-old agreements unconstitutional.

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In their joint statement on Tuesday, the six countries claimed that following the court ruling, China has retaliated against Panama with “targeted economic pressure” on Panamanian-flagged ships.

China detained nearly 70 Panamanian-flagged ships in March, according to the US Federal Maritime Commission, a number “far exceeding historical norms”.

“These actions – following the decision of Panama’s independent Supreme Court regarding the Balboa and Cristobal terminals – are a blatant attempt to politicise maritime trade and infringe on the sovereignty of the nations of our hemisphere,” the signatories said.

US Secretary of State Marco Rubio said separately on X that Washington was “deeply concerned” by China’s economic pressure on Panama.

“We stand in solidarity with Panama. Any attempts to undermine Panama’s sovereignty are a threat to us all,” he said.

China has previously accused the US of “bullying” and trying to smear its reputation in Latin America, while it described the Panamanian Supreme Court ruling as “absurd” and “shameful”.

US Federal Maritime Commission head Laura DiBella said last month that Beijing’s detention of Panamanian ships had repercussions for both Panama and the US.

“These intensified inspections were carried out under informal directives and appear intended to punish Panama after the transfer of Hutchison’s port assets,” DiBella said.

“Given that Panama‑flagged ships carry a meaningful share of US containerised trade, these actions could result in significant commercial and strategic consequences to US shipping,” she said.

‘States know how vulnerable shipping is’

Panama’s decision to invalidate the contracts held by CK Hutchison’s subsidiary Panama Ports Company was made at a time of heightened media attention around the Panama Canal amid threats by US President Donald Trump to seize the strategic waterway.

Trump had made the approximately 80km (49-mile) waterway a focus of his second administration, alleging in his inaugural address in January 2025 that China was “operating” the canal and pledging that the US would “take back” control.

US officials allege that, in addition to targeting Panama and its interests, China has also retaliated against shipping giants Maersk and the Mediterranean Shipping Company (MSC), whose subsidiaries were granted 18-month contracts to administer the Balboa and Cristobal terminals after CK Hutchison was removed.

Representatives of Maersk and MSC were both summoned by China’s Ministry of Transport for “high-level discussions”, the Federal Maritime Commission said in March, while Chinese shipping giant COSCO has suspended operations at the Balboa terminal.

CK Hutchison, through its Panama Ports Company subsidiary, is separately pursuing international arbitration against the government of Panama and seeking more than $2bn in damages.

David Smith, an associate professor at the University of Sydney’s US Studies Centre, said that the Panama Canal dispute and China’s retaliation were the latest example of how shipping has become a political target, from Latin America to the Strait of Hormuz and the Red Sea in the Middle East.

“We have taken for granted that the world runs on container ships just freely sailing around the world,” he told Al Jazeera.

“What we’re seeing now is that states know how vulnerable shipping is. They know they can cut shipping lanes off if necessary. It should not surprise us from now on if ships and shipping in general become pawns in international politics.”

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