The Panama Canal Has a Big Problem, But It's Not China or Trump

Climate change is causing drought conditions that are making it harder to operate the waterway and more expensive to pass through.

- Dennis M. Hogan

In 2023, on a research trip to Panama, I booked a day tour of the Panama Canal. I expected to hear the usual story about the canal's epic construction, importance in world trade and successful expansion to allow for larger modern ships. What I did not expect was the overwhelming sense of concern, even panic, among people who depend on the canal for their livelihoods.

It was July, the middle of Panama's rainy season. But the rains had been sparse, and water levels in the canal had sunk to troubling lows. Without freshwater from rain, our guide explained, the locks on the canal could not operate.

I remembered that visit after President-elect Donald Trump said recently that the Chinese were threatening America's interests at the canal, and he engaged in some saber-rattling by suggesting that the United States could take back control of the passage, which was returned to Panama exactly 25 years ago on Dec 31. The handover treaties were a signature achievement of President Jimmy Carter, who died on Dec 29, 2024; Trump's comments were in keeping with longstanding criticism that the move was a strategic mistake.

But Trump misunderstands the true threat to US commerce through Panama. If the goal is securing affordable access to the transit point over the long term, it is climate change, not Chinese influence, that US policymakers should worry about.

Here's why. Sending a single ship through the canal's locks can use around 50 million gallons (227 million liters) of water, mainly freshwater collected from Lake Gatun. Though the canal is, for the moment, operating at full capacity, a drier climate and greater demand for drinking water have in recent years reduced the volume of available water. That has forced the state-run Panama Canal Authority at times to limit the number of daily passages through the canal, at one point by as much as 40 percent.