The Future of the Panama Canal: Climate Resilience and Strategic Competition

Disruptions at the Strait of Hormuz have refocused attention on the world’s strategic waterways and chokepoints, including the Panama Canal, a vital artery of global commerce that facilitates five percent of maritime trade. The interoceanic shortcut is particularly vital to the United States, its largest user, connecting the East and West Coasts and linking the East and Gulf Coasts to Asia. It is a symbol of U.S. and Panamanian engineering, and of Panamanian nationhood. While the Canal remains indispensable to global supply chains, it faces mounting pressures, from drought and new competition from trade corridors such as Arctic routes and interoceanic alternatives across Mexico to growing scrutiny over the environmental impacts of global shipping, slowing global trade, and a tug of war over the Canal and its ports between major global powers.