Panama Canal Challenges Reshape US Trade
Extreme weather and climate change pose challenges to the Panama Canal, affecting global trade and increasing costs for shipping companies.
The Panama Canal, an important route for Asia-US East Coast trade, is facing significant challenges due to extreme weather. Predicted harsher dry seasons in Panama are expected to lower the water levels in the Canal, particularly in the Gatun Lake which feeds it. The reduced water levels, possibly exacerbated by a predicted El Nino event, will limit the Canal's capacity and affect global trade. Consequently, shipping companies face increased costs due to increased Panama Canal charges and reduced cargo loads, likely leading to the redistribution of trade from the US West Coast to the East Coast. Long-term changes in weather patterns due to climate change imply the Canal could become a bottleneck for global trade.