Panama’s president rejected Donald Trump’s threat to reimpose US control over the Panama Canal, stating that sovereignty over the waterway is not negotiable.

“Every square meter of the Panama Canal and its adjacent zones is part of Panama, and it will continue to be,” José Raúl Mulino said Sunday in a video statement on X, the social platform.

After Mulino’s retort, President-elect Trump said, “We’ll see about that!” on his Truth Social platform. (Click here to read the full story.)

Xeneta analyst Emily Stausbøll said Trump’s comments add to the uncertainty for global trade heading into 2025. “But the likelihood of this actually being followed through is so low that we don’t expect to see any reaction from shippers or carriers — at this stage,” she said.

Shipping industry veteran John McCown, author of the book “Giants of the Sea,” noted that Panama Canal tolls totaled $3.35 billion in 2023 based on 14,080 transits, or about $238,000 in tolls for each ship’s passage. That’s up about 29% from 2017, he said. 

Container ships account for about 20%, he added, and Panama Canal tolls are less than two-thirds of the charges for crossing the Suez Canal.

Read More: Trump Upending Global Politics a Month Before Taking Office

Tankers moving LNG have a high ratio of shipping cost to cargo value. “With news reports indicating that more LNG export facilities will be opened up, perhaps that might be something Trump is focused on with this threat,” said McCown, who wondered about the precedent set if the US were to retake control of the canal.

“This decision was long ago made and appropriately documented and we can’t just unilaterally say it never happened,” he said. “If we do that, what’s to stop Russia from saying we want Alaska back or France from saying we want the Louisiana Purchase back?  So, at multiple levels, this threat makes no sense to me.”

Read More: Trump Threatens Tariffs Unless EU Buys More US Oil and Gas 

Lars Jensen, the founder and CEO of Vespucci Maritime, said Trump appears to be “wholly ignorant of the facts” around the canal.

“The neutrality treaty which came in place when the Canal shifted back to Panama is very clear that Panama cannot ‘play favorites,’ i.e., advantage or disadvantage shipping interests from specific countries,” Jensen said. “Demanding lower prices for US shipping would be a violation of the this treaty.”

—Brendan Murray in London

Click here for more of Bloomberg.com’s most-read stories about trade, supply chains and shipping.

Charted Territory

Rail strains | Russia faces increasing difficulty shipping commodities to China through its vast eastern rail network, a sign of the growing economic challenges stemming from war and sanctions, despite the Kremlin’s assurances that all is well. Russian Railways JSC — the state-owned carrier responsible for all rail transport throughout the country — last week approved a 30% cut in its investment program for next year amid soaring borrowing costs, news agency Tass reported.

Today’s Must Reads

• South Korea’s  early trade data showed exports holding up for now as political turmoil at home and Donald Trump’s upcoming return to power in the US overshadow the outlook for the trade-reliant economy next year.
• The Biden’s administration is launching an investigation that will offer Trump a choice about whether to enact new tariffs on Chinese-made semiconductors.
• Chinese automakers captured their smallest share of Europe’s electric-vehicle market in eight months, after new tariffs added as much as 35% to the cost of importing cars to the region.
• The biggest vessel-ordering program since the eve of the global financial crisis is putting a squeeze on the shipbuilding industry’s capacity to construct new vessels. 
• Indonesia claimed victory after Apple offered to increase its investment in the country to $1 billion to get President Prabowo Subianto’s government to lift a ban on the sale of iPhone 16s. The win may be short-lived.
• The Biden administration is mulling exempting Mexico from tariffs on imported solar equipment, a last-minute change that would primarily benefit Maxeon Solar Technologies.
• Auto sales around the world are expected to grow marginally next year on increased supplies of vehicles, but production levels are likely to fall as carmakers seek to rein in inventory levels, according to S&P Global Mobility estimates.
• Germany's Gerhardi Kunststofftechnik, a 226-year-old plastics manufacturer, has filed for bankruptcy due to the European auto slump.

On the Bloomberg Terminal

• There are some big unknowns about the tariffs US President-elect Donald Trump has threatened to impose on the European Union. In this report, Bloomberg Economics addresses these uncertainties by looking at how the EU would react in various scenario.
• Buyers and sellers of lithium are locked in annual supply talks for 2025 as producers push for better terms after another challenging year for the key battery material.
• Run SPLC after an equity ticker on Bloomberg to show critical data about a company's suppliers, customers and peers.
• Use the AHOY function to track global commodities trade flows.
• See DSET CHOKE for a dataset to monitor shipping chokepoints. 
• For freight dashboards, see {BI RAIL}, {BI TRCK} and {BI SHIP} and {BI 3PLS}
• Click HERE for automated stories about supply chains.
• On the Bloomberg Terminal, type NH FWV for FreightWaves content.
• See BNEF for BloombergNEF’s analysis of clean energy, advanced transport, digital industry, innovative materials, and commodities.

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