n early February 2025, Rubio flew to Panama to pressurize the Panamanian government into taking over two strategically important container terminals operated by Hong Kong–based CK Hutchison. By 23 February 2026, a court ruling declared the terminal service agreement – originally valid until 2047 – null and void.
The two terminals were immediately handed over to Maersk and MSC.
China’s response was swift but non-military. It instructed all Chinese ports to conduct rigorous seaworthiness checks on every cargo ship flying the Panamanian flag. While fully legal and proper, China implemented these checks with exceptional thoroughness.
By the end of March 2026, over 70 ships had been held up at Chinese ports – seven times the number from the previous year.
So what’s the impact, and who ultimately suffers?
For each day of delay, ship owners, operators, and importers incur penalties. At least 30% of Panama-flagged vessels are directly or indirectly owned by U.S. companies, and most of their cargo is destined for the United States. Daily penalties can range from US$50,000 upward. These costs are now effectively landing on Rubio’s desk.
The second effect came quickly: Panama flag de-registrations skyrocketed.
Furthermore, China disconnected the terminal management systems and removed all empty containers. The two terminals have since ground to a halt, with an estimated annual revenue loss of US$4 billion.
Rubio has begun publicly complaining that China is bullying Panama. But what else can he do? He can no longer even fart – his asshole is totally screwed.
