In a move that sounds like the plot of the latest New York Times thriller novel, there’s talk of the US "taking back" the Panama Canal. While it is highly unlikely that there’s a global supervillain lurking among the locks and byways of Panama, there are some real world impacts so we should probably see what’s going on down there.
Here are Five Fast Facts on the Panama Canal controversy:
- 💰 Big Money - Why is the Panama Canal a big deal? First, there’s big bucks involved. Every ship through the canal pays a toll. The US sends more than three times the cargo through there than anyone else, and roughly 30% more than the next top 10 countries combined. Cha-ching says Panama.
- 🚦 Big Traffic - Cutting through Panama shortens a ship’s voyage from 27 days to just 11 if sailing between the East and West coasts. The alternative is to sail aaaaaaaalllllll the way down around the entire continent of South America, then back up. Ain’t got time for that!
- 📈 Price Gouging - Prices for passage have gone up by 62% over the last five years. Since the US is by far the biggest customer, it’s not hard to connect the dots on why it’s a big deal for us. Panama, of course, says it’s because of droughts, upgrade costs, and demand (though usage has only gone up 2%...hm…).
- 👤 Shadow Strings - A lot of powerful people in Washington DC (in both parties) are concerned that China is secretly pulling the strings in Panama. Panama says that’s not true, though Chinese companies run the ports on both sides of the Canal, and a growing influence in Latin America in general. Total coincidence, though, just trust them on that.
- 🥕 Take The Carrot - The Trump administration is chatting with the Panamanian government to work things out. Trump hasn’t taken military action off the table, but it’s very unlikely to come to that. It’s better for everyone if they take the carrot rather than risk the stick!
🔥Bottom line: The increased costs of using the Panama Canal do impact our wallets, though not nearly as much as something like inflation or tax rates. Still…it is good to keep an eye on this situation. Also, that way we’ll see it immediately if that supervillain comes out of hiding.
What do you think about the US taking back the Panama Canal?
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