Panama Canal Fees Have Become a Flashpoint. Heres Why Theyve Risen.
The cost of using the Panama Canal has risen in recent years — excessively so, President Trump has asserted.The canal operator says droughts, investments in upgrades and sheer demand are among the reasons.But if Mr.
Trump wrests lower canal fees out of Panama, American consumers may not feel much difference, because canal costs make up only a small part of the retail cost of most goods.One analysis concludes that going through the canal adds 10 cents to the cost of a coffee maker.Panama Canal shipping fees were not a big issue until Mr.
Trump raised the matter last year.As well as highlighting the costs of using the canal, American politicians have security concerns.They point out that China has made big investments in Panama’s infrastructure and that a Hong Kong company operates ports at both the Atlantic and Pacific ends of the canal.
Secretary of State Marco Rubio, in a visit to Panama on Sunday, appeared to escalate those security concerns with Panama’s leader.China has no role in operating the canal, a job done by the Panama Canal Authority, a Panamanian agency.The United States built the canal in the early 20th century, mostly with laborers from the Caribbean, and ceded it to Panama in 1999 on condition that it be neutral.Mr.
Trump has said that move, under a 1978 treaty, was a blunder by the United States, and he has refused to rule out military force to retake the waterway.In response, President José Raúl Mulino of Panama declared recently, “The canal is and will continue to be Panama’s.” He reiterated that on Sunday after meeting with Mr.
Rubio: “There is no question that the canal is operated by Panama and will continue to be so.”The canal is crucial for the U.S.economy because it permits a shorter route between the East Coast and Asia than traveling across the Atlantic and Indian Oceans.
Forty percent of United States container traffic and large amounts of U.S.energy exports travel through the canal on vessels paying tolls and oth...