US accuses China of ‘bullying’ Panama-based ships, Beijing says ‘repeated wrongful allegations’ being spread to take control of canal

China’s decision to detain or otherwise impede Panama-flagged vessels engaged in lawful trade destabilizes amounts to “bullying”, US Secretary of State Marco Rubio said on Thursday. The alleged “bullying” by China began after Panama struck down contracts with a Hong Kong conglomerate operating ports on both sides of the Panama Canal.

Panama has been caught in a broader rivalry between Washington and Beijing after President Donald Trump accused China last year of running the Panama Canal. The Trump administration sees the critical maritime trade route as strategically important, both commercially and militarily, and has not shied away from retaking the Panama Canal since his campaign.

“China’s decision to detain or otherwise impede Panama-flagged vessels engaged in lawful trade destabilizes supply chains, raises costs, and erodes confidence in the global trading system,” Rubio said on social media. “The United States stands with Panama against any retaliatory actions against its sovereignty and will always support our partners in the face of bullying.”

China denies the allegations

92 of the 124 ships — or nearly 75% — were detained in Chinese ports for inspection were Panama-flagged, according to public data from Tokyo MOU, a regional port state control organisation comprising 22 member authorities in the Asia-Pacific region.

These ships were typically detained for a few days — as short as one day or as long as 10 days — before being released.

China has dismissed the US allegations, with Liu Pengyu, spokesperson for the Chinese embassy in Washington claiming that America’s “repeated wrongful allegations” only reveal its attempt to take control of the canal. The Chinses official, however, he did not address the uptick in the number of Panama-flagged ships held up in Chinese ports.

Panama cancelled contracts with a Hong Kong-based CK Hutchison Holdings after its supreme court, in a ruling in January, called the concession held by the company over the Balboa and Cristóbal terminals as unconstitutional.

The US has put pressure on the South American country to curb China’s sway in the Western Hemisphere, where Trump has said he would increasingly focus.