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US imports and exports account for 75 % of the cargo transiting the Panama Canal( pictured). Shutterstock. com

Panama Canal Authority hits back at FMC chokepoint probe as unwarranted

By Michael Angell

The agency in charge of the Panama Canal is pushing back against claims by the US Federal Maritime Commission( FMC) that it discriminates against US waterborne commerce and says Chinese ownership of nearby ports has no bearing on ship transits through the waterway.

The Panama Canal Authority( ACP) delivered the comments on May 13 in response to the FMC’ s review of“ international maritime chokepoints” that will be included in its next report to Congress. Along with probes into six other major shipping lanes, the FMC highlighted the Panama Canal’ s“ geopolitical importance,” adding that it is“ crucial to the interests of the United States.”

In response to any unfair treatment in waterborne commerce, the FMC said the US could deny the entry of ships registered to countries“ responsible for creating unfavorable conditions.”

The canal has become the subject of renewed interest in the US after President Donald Trump called the 1977 treaty giving Panama control of the canal a“ rip-off” and urged“ taking back” that control. Trump also alleged China has gained influence over canal transits and that the US vessels pay higher tolls than those of other countries.

“ No conditions exist at the Panama Canal, and no actions have been taken by the ACP in administering the canal, that discriminate against the United States, US interests, or global maritime trade involving the United States,” the ACP said.

The agency’ s comments cited language in the 1977 treaty that required the canal to be operated as a neutral waterway open to ships from any country. Panamanian law gives the ACP sole authority over the canal, relieving it of any political pressure from the country’ s government.

A separate treaty between the US and Panama gives navy ships of both countries priority transits during emergencies. US naval vessels pay transit tolls but do not have to pay the reservation fees that commercial ships pay.

Since canal ownership was officially transferred in 1999, the US Navy has paid about $ 1 million per year in canal tolls, according to the ACP, with US warships accounting for less than 1 % of vessel traffic during that time.

ACP also said there is no discrimination against US commercial shipping, citing data that shows 75 % of the cargo going through the canal originates or ends in the US. The flag registry of ships going through the canal also doesn’ t indicate any favoritism, the ACP said.

Respecting‘ legal norms’

Part of Trump’ s claims about Chinese influence over the canal stems from Hong Kong-based CK Hutchison operating two nearby marine terminals, which are now part of a possible acquisition by US investment fund Black- Rock and Terminal Investment Limited, a unit of Mediterranean Shipping Co.( MSC).

“ No conditions exist at the Panama Canal... that discriminate against the United States.”

The ACP noted Hutchison’ s port concessions are granted by Panama, which also granted concessions to US, Taiwanese and Singaporean operators. Moreover, the ACP said there is no requirement for ships to stop at the Hutchison terminals and no evidence the Hutchison terminals are favoring one nation’ s ships over another’ s.

“ To the extent concerns have been expressed about the potential for future actions by Hutchison or the government of China, to the ACP’ s knowledge, those concerns

34 Journal of Commerce | June 2, 2025 www. joc. com