Lucy Marvin's Maritime Musings: The Next Big FMC Investigation and Larger Capitol Hill Impacts

Editors' Note: Lucy is the newest member of The Commission Blog editorial team and joins Holland & Knight to bolster our maritime, rail and road efforts as a part of the Public Policy & Regulation Group and Federal Government Affairs Practice. As FMC Managing Director during the Biden and second Trump Administrations, Holland & Knight has turned The Commission Blog over to Lucy to share her invaluable insights each day during the week of July 20, 2026. These efforts kick off Holland & Knight's celebration of the FMC's 65th anniversary on August 12, 2026, with an industry event (more details to follow).

China's ongoing detention of Panama-flagged vessels for port state control inspections over the last few months has garnered much attention by the trade press, Trump Administration and FMC. The Trump Administration has been focused on this issue since earlier this year, and U.S. Secretary of State Marco Rubio addressed China's aggressive actions in April 2026. At the FMC, Chair Laura DiBella also voiced her concerns that China's actions appeared "intended to punish Panama" and could result in "significant commercial and strategic consequences to U.S. shipping."

Similar to China's continuing detentions of Panamanian vessels, Chair DiBella's concerns persist as reiterated in her recent statement, which provides a striking reminder of the FMC's authority to address unfavorable conditions to shipping in foreign trade – and the Commission's willingness to use it. Chair DiBella emphasized the Commission's formidable authority under the Shipping Act to investigate whether regulations or practices of foreign governments have caused conditions unfavorable to shipping in the foreign trade of the United States. In such instances, Chair DiBella noted that the Commission is empowered to implement remedial measures, "including measures affecting Chinese-controlled carriers operating in U.S. trade." The specific measures she could be referring to include restricting China's access to U.S. ports, limiting a specific amount or type of cargo that China-owned vessels are legally permitted to carry, imposing substantial fees and suspending a carrier's ocean tariffs, and making it illegal for them to load or unload commercial cargo in U.S. waters. These are just some of the tools granted by statute to the Commission to address conditions unfavorable to shipping in the foreign commerce of the United States under the Shipping Act.

Given the Panamanian registry's key role in U.S. commerce, continued vessel detentions could cause disruptions to American interests on some scale. After all, the U.S. supply chain begins beyond our borders. Cargo that doesn't move is cargo that doesn't enter the marketplace. Given the Commission's recent willingness to increase its exercise of investigative authorities, Chair DiBella's statement implies that these concerns over China's practices could prompt the next big investigation opened by the FMC.

It is not surprising the FMC is leading the industry conversation on this critical issue. What is more surprising has been the modest response in the U.S. Congress. Sen. John Curtis (R-Utah), chair of the U.S. Senate Committee on Foreign Relations Subcommittee on the Western Hemisphere, held a hearing to scrutinize China's actions. The focus on supply chain impact for the U.S. is evident, and my understanding of the mood on Capitol Hill is that this issue will gain further traction after Labor Day. Even with the midterm elections, the issue cannot be avoided as the Chinese port tax on vessels issue will also being coming to a head in November 2026.

The Commission Blog is tracking developments on the detention of Panama-flagged ships by China at the FMC and in Congress and will keep clients closely advised.