The ongoing dispute between Chinese and U.S. officials over maritime practices involving Panama has intensified, according to a report published on July 13, 2026, by The Maritime Executive. U.S. officials have accused China of using its maritime and economic influence to pressure Panama and other countries, specifically targeting vessels flying the Panamanian flag through port state inspections and detentions following Panama’s cancellation of a port concession held by CK Hutchison.

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U.S. Ambassador to the United Kingdom and the International Maritime Organization, Warren Stephens, described the situation as a troubling example of nations weaponizing maritime commerce. In his first address to the IMO on July 7, he urged the organization to pay greater attention to the issue. The Ambassador alleged that China uses its maritime and economic power to coerce, intimidate, and punish nations that assert their sovereign rights, and stated that the IMO cannot ignore what he called a systematic effort by China to use maritime power, asserting that the evidence is clear and growing.

Panamanian President Jose Raul Mulino also commented on the matter in June, citing a sharp increase in abnormal inspections and detentions. He told the Organization of American States that there was no technical or safety justification for the rise in detentions.

In response, Chinese Foreign Ministry spokesperson Lin Jian, during a daily presentation on July 13, cited statistics to refute the U.S. claims. He reiterated China’s position that it is lawfully and responsibly conducting port state inspections as required by international regulations on visiting vessels. Lin asserted that Panama-flagged vessels have registered multiple casualties meeting or exceeding the statutory accident classification threshold in Chinese waters, and that such ships experience incidents more frequently than vessels of any other flag state. He noted that Panama-flagged vessels make up less than 20 percent of all foreign vessels calling at Chinese ports so far in 2026, yet account for around 50 percent of accidents and consequent deaths and missing persons. China has stated that Panama-flag vessels have been involved in accidents with coastal fishing boats, which it cites as the reason for the inspections.

The Chairman of the U.S. Federal Maritime Commission, Laura DiBella, also spoke on the issue last week. She suggested the FMC would become involved, noting that Panama-flagged ships transport a meaningful amount of U.S. commerce. DiBella said the laws the FMC administers empower it to investigate whether foreign government regulations or practices result in conditions unfavorable to shipping in the foreign trade of the United States, and that the FMC has the power to implement remedial measures.

An analysis released last week by Lloyds Intelligence showed that vessels were transferring out of the Panama flag registry following the increase in inspections and detentions. The analysis indicated that, despite an apparent decline in the number of inspections and detentions China was conducting, ships are moving to the flags of the Bahamas and the Marshall Islands. Chinese officials have said the inspections will continue to ensure the safety of vessel operations.

Source: IndexBox Market Intelligence Platform