Beijing Accuses Washington of Plot to ‘Seize’ Panama Canal Amid Escalating Port War and Shipping Sanctions

Beijing claims the US intends to "seize" the Panama Canal as Washington accuses China of detaining Panama-flagged ships. Read about the $2B legal battle.

By: AXL Media

Published: Mar 27, 2026, 1:05 PM EDT

Source: Information for this report was sourced from Anadolu Agency and the Federal Maritime Commission.

The "Seizure" Accusation: A Cold War Flashpoint

The geopolitical battle over the world’s most strategic waterway reached a new fever pitch on Friday. Chinese Foreign Ministry spokesperson Lin Jian stated that "repeated U.S. hype" regarding Panama Canal security is merely a cover for Washington’s own "intention to seize the canal." This rhetoric directly challenges the 1977 Torrijos-Carter Treaties, which granted Panama full sovereignty over the waterway in 1999. Beijing’s accusations suggest that the U.S. is leveraging its "Cold War mentality" to push out Chinese commercial interests and re-establish a military or administrative foothold in its "backyard."

The Battle of the Ports: CK Hutchison vs. The Supreme Court

The current friction was ignited by a January 2026 ruling from Panama’s Supreme Court, which invalidated the concession of Panama Ports Company (PPC), a subsidiary of Hong Kong-based conglomerate CK Hutchison. The court declared the decades-old contract unconstitutional, citing "irregularities" and an unfair advantage to the operator. Following the ruling, the Panamanian government authorized the "urgent social interest" occupation of the Balboa and Cristóbal terminals—the Pacific and Atlantic gateways to the canal. CK Hutchison has since launched an international arbitration claim seeking over $2 billion in damages, accusing Panama of an "unlawful campaign" fueled by U.S. political pressure.

U.S. Allegations of "Port State Retaliation"

On Thursday, the U.S. Federal Maritime Commission (FMC) accused China of using its port authorities to retaliate against the Panamanian flag. According to the FMC, Chinese officials have imposed a "surge in detentions" of Panama-flagged vessels under the guise of safety inspections. Data from the Tokyo MOU indicates that nearly 70 Panama-flagged ships have been detained in Chinese ports since March 8, 2026—a rate roughly five times the historical average. Washington characterizes these actions as a direct "punishment" of Panama for transferring port assets to interim operators, including U.S.-linked subsidiaries of Maersk and MSC.