U.S. Federal Maritime Commission (FMC) Chairman Laura DiBella on Thursday warned that the FMC is closely monitoring a surge in detentions of Panama-flagged vessels by Chinese authorities after the Panamanian Supreme court annulled contracts that gave Hong Kong-based CK Hutchison control of two key Panama Canal ports.
DiBella, in an official statement, said that China’s retaliatory actions against the Panamanian vessels are affecting global shipping conditions — and emphasized that laws administered by the FMC empower it to investigate if regulations or practices of foreign governments result in conditions unfavorable to shipping in the foreign trade of the United States.
“China has now imposed a surge in detentions of Panama‑flagged vessels in Chinese ports under the guise of port state control, far exceeding historical norms,” DiBella said. “These intensified inspections were carried out under informal directives and appear intended to punish Panama after the transfer of Hutchison’s port assets.”
“Given that Panama‑flagged ships carry a meaningful share of U.S. containerized trade, these actions could result in significant commercial and strategic consequences to U.S. shipping,” she continued.
For over two decades, CK Hutchison, through one of its subsidiaries, Panama Ports Company (PPC), had control of two key ports located at opposite ends of the Panama Canal, one in the province of Balboa and the other in Cristóbal, which handle as much as 40 percent of the canal’s entire traffic. CK Hutchison is controlled by pro-communist businessman Li Ka-shing. PPC was initially granted control of the two key ports through a contract signed with the Panamanian state 1997, which granted PPC a 25-year lease of both facilities. The contract was automatically renewed for a 25-year period in 2021.
In July 2025, Comptroller General of Panama Anel Flores filed a lawsuit against the contract and its renewal after an extensive investigation found that PPC incurred in financial damages of roughly $1.2 billion to Panama. Months before the lawsuit was presented, Panama’s Attorney General Luis Carlos Gómez determined that the contract presented numerous violations of Panama’s rights and granted the Chinese-linked company with disproportionate rights over the port’s management.
In late January, Panama’s Supreme Court ruled to annul the controversial contracts. U.S. Secretary of State Marco Rubio said at the time that the United States is “encouraged” by the Panamanian top court’s ruling against the China-linked company.
The ruling officially went into effect a month later in February — prompting the administration of conservative President José Raúl Mulino to immediately take administrative and operative control of the two key ports from PPC while at the same time, launching an ongoing process towards signing new lease deals for the facilities. Days later, officials from the Panamanian Prosecutor’s Office raided PPC’s offices as part of a probe into allegations that the company deliberately withheld information of its management of the ports to local authorities.
At press time, and to ensure regular operations at the Panama Canal throughout the ongoing transition process, the Balboa port is being temporarily administered by APM Terminals, a subsidiary of Danish shipping conglomerate Maersk while the Cristóbal port is being temporarily administered by TIL Panama, a subsidiary of Geneva-based Mediterranean Shipping Company (MSC).
The Chinese communist regime has repeatedly condemned the Supreme Court’s annulment of the PPC contracts. Chinese Foreign Ministry spokeswoman Mao Ning expressed in February that China “will firmly protect the company’s legitimate and lawful rights and interests.”
Chairman DiBella noted in her statement that CK Hutchison has steadily escalated legal actions against the government of Panama over the ruling and, as early as this week, filed arbitration proceedings seeking more than $2 billion in damages. DiBella also detailed that the Chinese Transport Ministry summoned Maersk and MSC representatives to Beijing for high‑level discussions while Chinese state-owned carrier COSCO has suspended its services at Balboa and rerouted operations.
The FMC Chairman’s statement comes weeks after a Trump administration official told Breitbart News earlier this month that the Chinese regime had threatened to detain Panamanian-flagged vessels in China — an retaliatory action against Panama that could disrupt global commerce.
“An email was made to the consulate from a company — a major shipping line — sent this to the consulate, Panama’s consulate in Greece,” the official told Breitbart News, and detailed that China’s Maritime Safety Administration (MSA) had “advised that ships with Panamanian flags will be detained at Chinese ports due to political reasons.”
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.
