US tariffs to keep Panama Canal transits below capacity in 2026: ACP

Daily transits of commercial vessels through the Panama Canal will remain below its capacity next year due to the tariff-linked frontloading of US imports this year and the softer demand the duties will cause on the East and Gulf coasts, the Panama Canal Authority (ACP) said Tuesday.

The waterway has the capacity to handle 36 daily transits, but ACP Administrator Ricaurte Vásquez Morales told a media briefing the daily average is projected to land at only 33 in 2026, still below levels seen before Panama’s 2023–24 drought.

The frontloading of US imports to avoid higher tariffs is “bread for today and hunger for tomorrow,” Morales said, adding that tariffs will raise product costs and dampen demand.

The canal saw an average of 32.5 daily transits in August, up from an average of 30.9 in 2024. It last hit its capacity of 36 daily transits on average in 2022. In both 2023 and 2024, low water levels drove the ACP to limit daily passages through the canal, including a low of 25 in November 2023.

While ACP data shows container ships accounted for about 24% of Panama Canal transits during the first eight months of 2025, Morales said about 45% of the canal’s revenue comes from container vessels. The Panama Canal’s fiscal year 2026 budget, approved in August, forecasts a 400-million-ton reduction in transits compared with the 2025 fiscal year, said Morales.

“In this volatility, we need to be very careful [and] not generate bigger expectations other than what we consider reasonable, because the Panama Canal revenue represents between 20% and 25% of overall Panamanian government revenue,” he said.

Other significant 2026 budget items include investments in the Río Indio Lake project, which would address low water concerns through the damming of a Panamanian river.

That project, which is expected to cost up to $1.6 billion, will take about four years to complete and is set to begin in 2027. In the meantime, Morales said the canal is better positioned to handle low water levels than it was in the past.

“If we have to face [another] El Nino phenomenon, we are prepared,” he said. “The frequency of which this phenomenon occurs is [increasing] and we need to be prepared for that type of condition.”

Originally published in the Journal of Commerce, Sept. 16, 2025