Trump’s threats, climate change ignite debate over alternatives to Panama Canal

Nicaragua canal, Northwest Passage among possibilities

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Gatun locks on the Panama Canal. Photo: David Stanley/flickr.

(Michael Molinski is a senior economist at Trendline Economics. He’s worked for Fidelity, Charles Schwab and Wells Fargo, and previously as a foreign correspondent and editor for Bloomberg News and MarketWatch.)

PANAMA CITY (Callaway Climate Insights) — President Donald Trump’s threats to “take the Panama Canal back,” combined with climate change, have ignited a global debate over alternatives to the Canal, from building a new canal across Nicaragua, Costa Rica or Colombia to opening Canada’s fabled Northwest Passage.

When a consortium led by BlackRock BLK 0.00%↑ announced earlier this month it will buy China-based CK Hutchison’s ports on the Panama Canal, it lowered the tension between China, Panama and the U.S. However, while that tension has softened, the threats are still there. Indeed, Trump continued to threaten to take the Panama Canal back after BlackRock’s announcement.

It’s worth noting that the agreement between BlackRock and CK Hutchison is currently under investigation and must adhere to Hong Kong laws, Hong Kong leader John Lee said recently.

Worldwide, governments and investors continue exploring alternatives to the Panama Canal, which faces not only Trump’s actions but also climate change and drought issues.