{"id":60121085,"date":"2026-02-20T14:03:02","date_gmt":"2026-02-20T14:03:02","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60121085"},"modified":"2026-03-03T11:48:33","modified_gmt":"2026-03-03T11:48:33","slug":"climate-change-is-spurring-trumps-desire-for-the-panama-canal","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/climate-change-is-spurring-trumps-desire-for-the-panama-canal\/","title":{"rendered":"Climate change is spurring Trump\u2019s desire for the Panama canal"},"content":{"rendered":"\n

The Panama canal is one of the most important shipping lanes in the world. Up to 14,000 vessels<\/a> pass through it every year. In some cases, it cuts journey times by weeks<\/a>.<\/p>\n\n\n\n

Its importance has made it a key \u201cchokepoint\u201d for the global economy. This means it has attracted the attention of US President Donald Trump, who has over the past year claimed \u2013 without providing evidence \u2013 that it is being controlled by the Chinese. The US established the canal in 1904 and handed control of it to Panama in 1999. Trump has threatened to \u201ctake it back\u201d to secure national interests. <\/p>\n\n\n\n

A drought in 2023 caused water levels<\/a> in the canal to fall to historic lows. As conditions worsened, Panama was forced to repeatedly reduce<\/a> the number of ships allowed to pass through each day.

Experts warn this is a sign of things to come, as the climate crisis combined with weather phenomena could make these incidents more frequent<\/a> and pronounced in the future.<\/p>\n\n\n\n

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Ships waiting to pass through the Panama canal in August 2023, when a drought caused water levels in the canal to fall to historic lows and limited the number of ships allowed to cross each day (Image: Mauricio Valenzuela \/ dpa \/ Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

Alice Hill, a senior fellow at the US-based think-tank the Council on Foreign Relations, and a former White House energy resilience advisor, says \u201cfewer ships\u201d passing through the canal creates a chokepoint. \u201cIf you have to divert to the Cape of Good Hope, that\u2019s going to add weeks of travel and expense,\u201d she explains. \u201cIt\u2019s a shrinking asset and everybody wants a bigger part of the pie.\u201d<\/p>\n\n\n\n

The canal and the climate<\/h2>\n\n\n\n

Shipping is one of the world\u2019s largest industries, generating annual trade worth as much as USD 14 trillion, according to some estimates<\/a>. The 2021 stranding<\/a> of the Ever Given in the Suez canal \u2013 slightly busier than Panama\u2019s by traffic \u2013 highlighted how shipping disruptions cascade through the economy: the estimated cost was as much as USD 10 billion per day. The Panama canal is a freshwater system fed by two reservoirs, the largest of which is Lake Gat\u00fan. The two lakes also supply water to Panama City and other nearby settlements.<\/p>\n\n\n\n

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Samuel Mu\u00f1oz is an associate professor of marine and environmental sciences at Northeastern University in the US. He simulated water levels in Lake Gat\u00fan under a range of climate scenarios. The resulting paper<\/a>, published in September, says water levels will \u201cdecline substantially\u201d over the next 75 years under \u201chigh-emissions pathways\u201d. This highlights the \u201cgrowing risk of disruptions without adaptation or emissions mitigation,\u201d it concludes. Water levels remain relatively stable under low-emissions scenarios.<\/p>\n\n\n\n

Drought and low water levels tend to be linked to the cyclical El Ni\u00f1o weather phenomenon. Mu\u00f1oz is clear that his research does not tie existing low water levels to climate change, but says it shows that a warming planet is a clear risk factor. \u201c[While the research] can\u2019t say that these recent events are directly tied to climate change, it does say that the more we warm, the more of an issue this will become,\u201d he explains.<\/p>\n\n\n\n

The Panama Canal Authority (PCA), which has operated the canal since control was passed to Panama from the US, has taken steps to adapt the waterway. In 2016, it opened<\/a> a series of basins designed to reuse water. It will also build a third feed-in lake near the Indio River<\/a>. Local residents whose homes would be flooded have opposed the plans.<\/p>\n\n\n\n

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Dialogue Earth asked the PCA what other climate adaptation plans are in place to secure the canal\u2019s future but did not receive a response.<\/p>\n\n\n\n

Other countries have made proposals to compete with Panama. A Nicaraguan plan to build a rival waterway has stalled. More promising is a Mexican proposal<\/a> to build a coast-to-coast railway line, which some experts hope<\/a> could be more environmentally friendly than the canal.<\/p>\n\n\n\n

The tug of war over Latin America<\/h2>\n\n\n\n

As a consequence of the canal\u2019s importance to the global economy, the Panamanian government has found itself at the centre of Trump\u2019s aggressive stance on Latin America and its relations with China. In recent years, China has become Panama\u2019s largest trading partner<\/a>.<\/p>\n\n\n\n

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In November, the White House published<\/a> its National Security Strategy. It laid out what has been coined the \u201cDonroe Doctrine\u201d, a blend of Donald and former US president James Monroe, whose 19th century policy aimed to solidify US supremacy in the western hemisphere. The strategy states that \u201cnon-hemispheric competitors have made major inroads\u201d in the region, to \u201cdisadvantage us economically in the present, and in ways that may harm us strategically in the future\u201d. It adds: \u201cThe United States must be preeminent in the western hemisphere as a condition of our security and prosperity.\u201d<\/p>\n\n\n\n

The following month, the Chinese government released its third policy paper<\/a> on Latin America, which emphasises its role as an ally to the region. \u201cAs a developing country and a member of the Global South, China has always stood in solidarity through thick and thin with the Global South, including Latin America and the Caribbean,\u201d it reads. \u201cChina stands ready to join hands\u201d with the region to \u201cwrite a new chapter\u201d based on a \u201cshared future\u201d.<\/p>\n\n\n\n

Throughout Trump\u2019s second term, he has made clear his views on the canal\u2019s economic and strategic importance. It has military importance, too, with US warships passing through<\/a> last year amid tensions over Venezuela. Trump has described<\/a> the decision by former US president Jimmy Carter to hand over its running to the Panamanians as a \u201cbad deal\u201d.<\/p>\n\n\n\n

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However, it could be argued that geography makes the canal more important to China than to the US. Christopher Sabatini, a senior research fellow at UK-based think-tank Chatham House, and founder of the journal Americas Quarterly, says: \u201c[China] has to ship things through the canal to get to Brazil, for example. It\u2019s a geographic reality.\u201d <\/p>\n\n\n\n

A changing climate has also intensified this competition, according to Hill: \u201cI think we\u2019re seeing globally that, as conditions change, there\u2019s a struggle between the US and China for economic dominance. Shipping becomes so critical and Panama has certainly historically been a part of that.\u201d<\/p>\n\n\n\n

The US has a long history in Panama and we have a president who has asserted power in very dramatic ways and, sometimes, followed through on his threats<\/blockquote>Alice Hill, senior fellow, the Council on Foreign Relations<\/cite><\/div><\/div>\n\n\n\n

In February 2025, Panama left<\/a> the Belt and Road Initiative, the Chinese overseas development agreement. This January, Panama\u2019s supreme court ruled<\/a> that a contract held by a Hong Kong company since 1999 to manage ports at either end of the canal was unconstitutional.<\/p>\n\n\n\n

Trump has praised that decision; the Chinese government\u2019s office in Hong Kong called<\/a> it \u201cabsurd\u201d, and suggested Panama had \u201cwillingly succumbed\u201d to \u201cbullying\u201d tactics. The decision potentially opens the door for BlackRock, the US investment firm, to complete a takeover of the ports. These efforts had previously stumbled<\/a> over China\u2019s demand that its biggest shipping firm, COSCO, have a majority stake in any such takeover.<\/p>\n\n\n\n

\u201cThe US has a long history in Panama and we have a president who has asserted power in very dramatic ways and, sometimes, followed through on his threats,\u201d says Hill. \u201cIt\u2019s not surprising that [Panama] feels pressure coming from President Trump.\u201d<\/p>\n\n\n\n

Sabatini says: \u201cIf there was an inappropriate level of pressure put by the US on the Panamanian government that would be a shame, because it\u2019s a violation of the judicial independence of a democratic country.\u201d<\/p>\n\n\n\n

Such disputes serve to underline the vulnerability of the Panama canal as a chokepoint in a rapidly changing world. The climate crisis is likely to make this more pronounced over the coming decades.<\/p>\n","protected":false},"excerpt":{"rendered":"

This vulnerable artery of global trade is facing increasing pressure from droughts<\/p>\n","protected":false},"author":50000868,"featured_media":60121121,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[758,761,50039901],"tags":[50040720,591],"hashtags":[],"country":[50002599,50040700],"class_list":["post-60121085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-climate","category-ocean","tag-geopolitics","tag-shipping","country-panama","country-united-states-of-america"],"acf":[],"yoast_head":"\nClimate change is spurring Trump\u2019s desire for the Panama canal | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"This vulnerable artery of global trade is facing increasing pressure from droughts\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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