US Trade with Panama 8-5-25

In 2025, the US and Panama are navigating a complex relationship involving the Panama Canal, trade, and geopolitical influence, particularly concerning China. A key event was a deal where a US firm acquired the main Panama Canal ports, sparking both strategic interest and concerns about foreign influence. This deal, and other China-backed projects, have led to increased US scrutiny of the canal and its operations. 

Here's a breakdown of the situation: 

Port Acquisition: BlackRock, a US asset management firm, led a consortium in purchasing the concessions for the Balboa and Cristobal ports at the Panama Canal for nearly $23 billion. This deal is seen by the US as a way to restore American influence over the canal. 

Geopolitical Tensions: The US, under President Trump, has expressed concerns about China's growing presence and influence in Panama, particularly regarding infrastructure projects near the canal. This has led to increased US focus on the canal's neutrality and its role in US trade and national security. 

Panama's Position: Panama is navigating its relationship with both the US and China, emphasizing its sovereignty over the canal and adherence to the Torrijos-Carter Treaties. Panama has also withdrawn from China's Belt and Road Initiative and agreed to enhance security cooperation with the US. 

Trade Implications: The Panama Canal is vital for US trade, with a significant portion of US seaborne container trade passing through it. The US has also imposed tariffs on goods from Canada and Mexico, which has impacted trade with the region. 

Future Uncertainty: The situation remains dynamic, with ongoing discussions about US involvement in the canal's operations and the potential for further geopolitical shifts in the region.

US trade deal with Panama 2025

The United States and Panama have a trade relationship largely governed by the 

U.S.-Panama Trade Promotion Agreement (TPA). This bilateral free trade agreement entered into force on October 31, 2012, aiming to reduce and eliminate trade barriers between the two countries. 

Here's how the TPA is relevant in 2025:

·       Tariff reductions: The agreement phased out tariffs on most goods over a period of ten to fifteen years. This means that by 2025, a significant portion of trade between the two countries is duty-free or subject to reduced tariffs.

·       Market Access: The TPA guarantees expanded market access for both countries' goods and services, covering sectors like agriculture, industrial goods, and services, including financial, telecommunications, and environmental services.

·       Investment Protection and Dispute Settlement: The agreement ensures protections for investors and provides mechanisms for resolving trade and investment disputes. 

Recent developments impacting the trade relationship:

·       U.S. tariffs and their impact on Latin America: In 2025, the U.S. implemented broad tariffs, impacting trade with Latin American countries like Panama, according to Americas Quarterly. Panama, along with other countries, has sought exemptions to restore fair market access.

·       Panama Canal ownership concerns: There have been recent concerns about potential Chinese influence on the Panama Canal, particularly following a planned sale of port operations to a U.S.-led group that faced an antitrust review in China. While this is not directly related to the existing trade deal, it highlights the importance of the canal to U.S.-Panama trade and could potentially introduce complexities into their relationship. 

In summary, the US-Panama Trade Promotion Agreement continues to be the foundation of their trade relations in 2025. While the agreement facilitates trade, recent developments like the U.S. tariffs and concerns about the Panama Canal's operations introduce some uncertainties and complexities that may shape the trade relationship moving forward. 

https://www.google.com/search?q=us+trade+deal+with+panama+2025

In 2025, Panama's top export goods include bananas, fish and shrimp, and raw sugar. Other notable exports are teak wood, coffee, and various agricultural products like pineapples and watermelons. The Panama Canal continues to be a significant contributor to the nation's economy, with canal tolls and increased shipping traffic boosting exports. 

Here's a more detailed breakdown:

Bananas: Remain Panama's primary export product, representing a significant portion of total national goods exports. 

Fish and Shrimp: Frozen shrimp and other fish products are also major exports for Panama. 

Raw Sugar: Raw cane sugar is another key export, contributing to export growth. 

Other Agricultural Products: Coffee, pineapples, watermelons, and teak wood are also exported, with some experiencing increased demand. 

The Panama Canal: Increased shipping traffic through the canal has boosted Panama's exports and overall economic growth. 

https://www.google.com/search?q=panama+goods+exported+2025

Estimating Panama's exact trade deficit in USD for 2025 is challenging, as forecasts can fluctuate based on global and local economic conditions. However, available data and projections suggest the following:

·       Current Account Deficit: Panama's current account deficit to GDP is projected to be around -3.10% by the end of 2025. While this includes more than just trade in goods and services, it provides an indication of the broader external balance.

·       Merchandise Trade Balance: The merchandise trade balance in Panama averaged USD -7.2 billion in the decade to 2024. In 2024, it was estimated at USD -6.0 billion.

·       Factors Influencing the Trade Balance:

o   The closure of the Cobre Panamá mine is likely to significantly affect exports, as it was previously the country's second-largest export source after the Canal.

o   While the Panama Canal is a major contributor to the economy and has seen increased activity in Q1 2025, a drought in the Canal could impact logistics services and potentially increase the current account deficit.

o   Panama projects to exceed $1 billion in exports by 2025, driven by bananas, shrimp, fish, teak wood, and pharmaceuticals, among others. 

Based on these factors, Panama is likely to continue experiencing a trade deficit in 2025. The exact figure will depend on the interplay of factors like the impact of the mine closure on exports, the recovery of Canal traffic, and the strength of other export sectors.

Panama's nominal GDP for 2025 is projected to be $91.68 billion USD, In 2025, Panama's nominal GDP per capita is projected to be $20,080, The estimated population of Panama in 2025 is 4,571,189. The unemployment rate in Panama is projected to be around 8% in 2025, Approximately 9,000 people are employed at the Panama Canal.

https://www.google.com/search?q=panama+trade+deficit+in+usd+2025

Norb Leahy, Dunwoody GA Tea Party Leader