China’s detention of Panama-flagged ships at Chinese ports in recent weeks has gotten the attention of America’s chief foreign policy official.

On Thursday, Secretary of State Marco Rubio chided China’s actions, saying they “raise serious concerns about the use of economic tools to undermine the rule of law in Panama.”

Secretary Rubio pointed out that the detentions have followed a January decision by Panama’s Supreme Court to rule Hong Kong-based CK Hutchison’s operation of the country’s Balboa and Cristóbal port terminals unconstitutional. The court’s judgment effectively voided the 25-year contract extension the port operator and the Panamanian government had signed in 2021.

“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 said in a statement.

The ruling dealt a blow to Beijing’s interests in the wider Latin American region, while simultaneously being seen as a win in Washington, which saw the potential for Chinese influence on the Panama Canal as a major national security risk.

The Balboa and Cristóbal ports, which operate on the Pacific and Atlantic sides of the Panama Canal, have been under heavy international spotlight since Hutchison had initially agreed to sell them to BlackRock and Mediterranean Shipping Company (MSC) for nearly $23 billion.

In response to Rubio’s comments, China’s Foreign Ministry spokesperson Mao Ning called the accusation of detainments “groundless and confuses right and wrong.”

“The U.S.’s repeated wrongful allegations only reveal its attempt to take control of the Panama Canal,” Mao said in a Friday morning press briefing.

In the first three days of April, seven of 13 vessels detained in Chinese ports have been Panama-flagged, according to Tokyo MOU, a regional ship inspection association consisting of 22 port authorities in the Asia-Pacific.

Throughout March, the contingent of detained Panama-linked ships was much higher at 93 of 125 vessels—nearly 75 percent of ships. This number outpaced February’s numbers, in which 20 ships of the 48—less than half—detained in China were Panama-registered. In January, 23 out of 72 detained ships were flagged in Panama.

Federal Maritime Commission chairman Laura DiBella said last week that the agency was closely monitoring the surge in detentions, which she said were “far exceeding historical norms.”

“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 U.S. containerized trade, these actions could result in significant commercial and strategic consequences to U.S. shipping.”

Tensions in the wake of the high court’s decision escalated throughout March, with China’s Transport Ministry calling in Maersk and MSC for a summons after both companies were named the temporary operators of the Balboa and Cristóbal terminals for the next 18 months.

Although the meetings revolved around “international shipping business conduct,” the ministry said, neither carrier explained the details of their discussions.

Subsequently, China’s largest state-owned container shipping company, Cosco Shipping, suspended its services at the Balboa port and rerouted its loops that were headed toward the Panamanian terminal.

According to a customer advisory, Cosco canceled confirmed bookings to Balboa and directed empty containers to the Manzanillo and Colon terminals on the Atlantic side. Import cargo already held at Balboa was released as normal.

Some transshipment cargo normally handled by Balboa on Cosco’s West Coast South America and regional Caribbean services has since been shifted to Mexico’s Lazaro Cardenas Port and Colombia’s Port of Buenaventura.

Panama’s government asked Cosco to reconsider the suspension, but the carrier has not budged.

“The Cosco issue has really taken us a little bit by surprise,” Jose Ramon Icaza, Panama’s minister for canal affairs, told reporters. “All cargo is important, and certainly Cosco’s cargo is important for us, for Panama, and we obviously hope that they will reconsider that decision not to use the port of Balboa.”

CK Hutchison, whose subsidiary Panama Ports Company (PPC) had operated the Panama ports since 1997, has rejected the court’s decision, and accused Panamanian authorities of unlawfully seizing its property. PPC filed an international arbitration complaint against the government, claiming damages of more than $2 billion.

Geopolitical pressures surrounding the Panama Canal and its adjacent ports began to fester in December 2024 after then-President elect Donald Trump expressed his desire to “take back” the trade artery, which the U.S. officially transferred to Panama on Dec. 31, 1999.