US and allies back Panama sovereignty amid tensions over China’s role in operations

The United States and several allies have issued a joint statement backing Panama’s sovereignty amid rising tensions over the Panama Canal.

According to the statement, the countries raised concerns about China’s actions affecting Panama flagged vessels and maritime trade.

"We are monitoring with vigilance China's targeted economic pressure and the recent actions that have affected Panama-flagged vessels," the statement said.

"Panama is a pillar of ⁠our maritime trading system, and as such must remain free from any undue external pressure."

The dispute follows a ruling by Panama’s Supreme Court earlier this year that invalidated a long standing concession allowing a Hong Kong based company to operate key ports at both ends of the canal.

The decision came amid growing pressure from Washington to limit Chinese influence around the strategic waterway, which carries about five percent of global maritime trade.

China responded by criticising the joint statement as a foreign ministry spokesperson said it was "entirely baseless and misleading" and accused the United States of politicising port operations.

"China ⁠also urges the relevant countries not to be deceived or exploited by malevolent forces," the spokesperson added.