The implications of Trump’s take on the Panama Canal

President Trump’s threats to retake ownership of the Panama Canal reflects its importance for US trade and the country’s strategic interests. It’s possible that these threats are simply another attempt to gain concessions, such as lower fees charged to the US. And even if Trump were to follow through, it’s unlikely that there would be major direct implications for the global economy or inflation, given that the Panama Canal only accounts for about 5% of global sea trade. The bigger implications would be the extent to which this influences global fracturing, which will shape trade relations for decades to come.