One pivotal moment occurred when Panama’s Supreme Court annulled contracts that allowed CK Hutchison to operate key ports in January 2026. This legal decision came amid accusations from the US that China had detained numerous Panama-flagged ships—an assertion that China vehemently denied.

Key facts:

• The Panama Canal is crucial for about six percent of global trade.
• Daily transits through the canal rose from an average of 34 in January to 37 in March 2026.
• In March alone, nearly 70 Panama-flagged ships were detained in Chinese ports, a significant increase from historical norms.
• Some vessels have paid up to USD 4 million to bypass queues at the canal.

This situation has drawn condemnation from not just the US but also several Latin American countries, who view China’s actions as an attempt to exert economic pressure on a vital shipping route. Marco Rubio stated, “Panama is a pillar of our maritime trading system, and as such must remain free from any undue external pressure.” Meanwhile, Laura DiBella warned that these actions could lead to significant commercial consequences for US shipping.