Panama Canal Losses Soar Due To Drought

President-elect Donald Trump may want to own the Panama Canal. There may be good strategic reasons to do so. Mr. Trump believes that China’s influence in Central America makes it more likely America’s primary rival could affect transit to and from the waterway.

Ownership of the Panama Canal would not be without cost. Because of droughts that have cut traffic through the canal in half, revenue dropped about $800 million in 2023. For 2024, that number could be higher. 

Another factor in the canal’s finances is that parts of the Panama Canal must be rebuilt because of drought. Or another channel has to be created. This also has to do with reducing the canal’s carbon footprint. These capital investments could be as high as $8.5 trillion. 

Dought Lowers Water

These costs could rise if the drought worsens. In the last few months, the water level in Gatun Lake, which helps fill the canal, has risen. However, the drought in Central America has no longer-term solution.

The US may want to take over the canal, but the decision won’t be cheap.

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