Trade War Hits Panama Canal
(Bloomberg) — The trade tension between the U.S. and China is making waves at the Panama Canal.
Cargo from the U.S. to China going through the key waterway has slumped this year as the Asian giant cuts its imports of American food and fuel, according to Panama Canal Authority CEO Jorge Luis Quijano.
Amid the dispute, Japan has displaced China as the canal’s second-largest user, while U.S. businesses remain the canal’s biggest customers, he said.
U.S. President Donald Trump complained this week that China hasn’t increased its purchases of American farm products, a promise he said he secured last month at a meeting with President Xi Jinping. China is relying more on countries such as Qatar, and Trinidad and Tobago, for liquefied natural gas (LNG), and Brazil for soy, according to Quijano.
“This is a bigger disadvantage to the U.S., because China just buys the same products elsewhere,” Quijano said.
The canal forecasts revenue of $3.2 billion this fiscal year, up 2% from 2018. That would have been higher without the trade dispute, which cut traffic from the U.S. to China by about 8 million tons since the current fiscal year started in October, according to Quijano. Traffic through the canal on the most important route, from the East Coast of the U.S. to Asia, was 78 million tons in the 2018 fiscal year.
Despite this, Moody’s Investors Service this year upgraded the canal’s credit rating to A1, from A2, citing its strong financial performance since the expansion, and low debt levels.
Quijano said the U.S-China dispute could cost the canal more money if tensions continue. At the same time, it may get a boost from new LNG terminals scheduled to come online in the coming months in the U.S. states of Georgia and Texas, which will help supply growing demand from Japan and South Korea, he said.
Low water levels caused by a drought this year forced the canal authority to restrict the size of vessels allowed to cross the new set of locks. A draft restriction of 44 feet that mainly affects container ships will likely remain in effect for the coming weeks until rainfall picks up, Quijano said.
The canal has studied the possibility of building an additional set of locks for even bigger ships, but demand isn’t likely to merit such an undertaking in the next 10 to 15 years, he said.
Contact editor Yang Ge (email@example.com)
Read more about the China-U.S. trade war.
Aug 17 05:58
Aug 17 04:13
Aug 16 20:48
Aug 16 18:19
Aug 16 16:10
Aug 16 15:19
Aug 16 15:07
Aug 16 15:35
Aug 16 12:23
Aug 16 10:44
Aug 16 03:04
Aug 16 03:39
Aug 16 02:05
Aug 16 02:36
Aug 15 15:10
- 1Praise for JD and Huya, Less Excitement for Tencent Music and DouYu as ‘Team Tencent’ Reports
- 2Casino Giant Galaxy Entertainment’s H1 Profit Drops 7% as High-Rollers Stay Away
- 3TCL to Unveil Own Smart Screen This Week, Sources Say
- 4CX Daily: Hong Kong Cuts GDP Growth Forecast, Announces Stimulus Amid Unrest
- 5Does China Care About Climate Change?
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas