China plays hardball on Panama Canal and Washington is watching

The US shipping regulator fired a warning shot at Beijing this week, putting the world's second-largest economy on notice that its campaign of maritime retaliation against Panama is now squarely in America's crosshairs.

Federal Maritime Commission Chair Laura DiBella said the agency is "closely monitoring" a surge in Chinese detentions of Panama-flagged vessels and their effects on global shipping conditions. The statement, issued Thursday, marked Washington's most direct public rebuke yet of what shippers and maritime analysts have described as economic coercion dressed up as routine port inspection.

The trigger is the Panama Canal. On January 30, Panama's Supreme Court invalidated the legal framework supporting Hong Kong-based CK Hutchison's concession to operate the Balboa and Cristóbal terminals on the Pacific and Atlantic sides of the waterway. Washington, which had long pressured Panama to reduce Chinese influence over the canal, got what it wanted. Beijing did not take it quietly.

China's Ministry of Transport summoned Maersk and MSC representatives to Beijing for high-level discussions, while state-owned carrier COSCO suspended its services at Balboa and rerouted operations. Panamanian-flagged vessels began reporting detentions at Chinese ports shortly after Panama appointed US-linked firms as interim terminal operators.

DiBella pulled no punches in characterising Beijing's conduct. She said the detentions were being carried out under informal directives and appeared intended to punish Panama following the transfer of Hutchison's port assets. Actions by foreign governments that detain or delay vessels in US commerce, she added, are inconsistent with the Commission's mandate to protect the reliability and integrity of America's global supply chain.

What Washington intends to do about it remains unclear. DiBella stopped short of announcing specific countermeasures, and the FMC had not responded to press inquiries at time of publication. But the signal is unmistakable: the Panama Canal dispute has become a live flashpoint in the broader US-China economic confrontation — and American regulators are no longer content to watch from the sidelines.