The decline in global trade resulting from the US-China trade war will mean fewer ships passing through the Panama Canal, according to Jorge Quijano, the Chief Executive Officer of the Panama Canal Authority.
In an interview with Reuters, Quijano warned that the importance of both countries to the global economy means a prolonged trade war could affect the traffic passing though the canal in both directions.
On September 7, 2018, Donald Trump suggested the US could impose tariffs worth $267 billion on Chinese goods, on top of the $200 billion of tariffs that are due to come into force this week.
However, despite his fears of the effects of the trade war, Quijano believes the canal could also benefit from increased cargo traffic from other parts of the world, such as South America.
The rising demand for liquefied natural gas (LNG) could also help the canal offset the losses incurred from the trade war.
Quijano commented: “Most cargoes passing through the Panama Canal come from or go to the United States and China.
“Tensions between them could ultimately have an impact on the amount of loadings using the waterway in any direction.
“If China eventually imports less LNG from the United States, we will see more imports from Japan, Korea and Mexico, which would compensate.”