Donald Trump’s economic plans are a chance for the Polish economy and ports

Source: Panama Canal Authority

By Marek Grzybowski

Recently, many questions have been asked: Why does Trump want to buy Greenland, regain the Panama Canal and unite Canada? Donald Trump’s “America First” program will certainly translate not only into domestic actions but also into the activities of the United States on the global map of the world. It will also affect maritime transport, ports and the entire global logistics. The new accents will change the position of many regions. The Baltic will certainly lose to the Pacific. But the Polish economy and Polish ports may benefit from it.

Donald Trump wrote on the Truth Social portal: “The fees charged by Panama are ridiculous, especially considering the extraordinary generosity that the United States has shown to Panama.” In turn, during a speech in Phoenix, Arizona, he emphasized that if the spirit of the 1977 agreement between the two nations is not respected, “we will demand that the Panama Canal be returned to the United States.”

President Jimmy Carter and General Omar Torrijos, on behalf of Panama, signed a treaty in 1977 giving Panama full control of the Panama Canal and withdrawing all US military forces from the country by December 31, 1999. Both leaders signed the Neutrality Treaty, which also guaranteed the neutrality of the canal for peaceful transit by ships from all countries, allowing each of them to intervene unilaterally if that neutrality is threatened. Trump’s latest reaction stems from his dislike and distrust of China, which was already shown during his previous term.

This is an important message for Beijing that it should not increase its activity in regions that are considered to be US interests. The PRC’s activity in Panama raised concerns a few years ago. The Diplomat reported two years ago that “Planned Chinese investments in Panama in recent years have included bridges, a railway, a commercial port and a cruise ship terminal.” One of the most important projects was the Panama Colon Container Port (PCCP). The new port was to be strategically located at the entrance to the Panama Canal.

Panama in the Circle of Interest of China and the US
These were actions taken after the meeting of Panamanian President Juan Carlos Varela and President Xi Jinping in Panama in December 2018. In 2017, Panama changed diplomatic relations with Taiwan to more active cooperation with the People’s Republic of China. Since 2013, China has made large infrastructure investments in Latin America as part of the Belt and Road Initiative (BRI) signed by President Xi Jinping. One of the significant recipients of Chinese investments was to be Panama. As early as 2015, a consortium of companies from the PRC, led by Landbridge Group – a Chinese conglomerate with interests in ports, oil and gas, and real estate – promised to invest around $900 million in the construction of PCCP.
Plans and relations quickly changed after Laurentino Cortizo was elected President of Panama in early 2019. After taking office, Cortizo suspended or canceled many Chinese investment projects. A review of the PCCP concession conducted by the Panama Maritime Administration (PMA), the government agency overseeing the country’s ports, found that the Landbridge-led consortium had failed to meet numerous conditions set out in the preliminary agreements. It had invested only about one-fifth of the promised amount, had not provided key project documentation, and had employed significantly less local labor than promised. The review led to the PMA’s decision to revoke the PCCP concession in June 2021.
The opening of the Chancay Port during the APEC summit in Peru was not only spectacular. It showed that the PRC’s activity in the Pacific and Latin American countries is at a completely different level than the EU and US cooperation with countries in this region. China is the largest trading partner of many Latin American countries, including Brazil, Peru, and Chile, emphasizes Leszek B. Ślazyk, expert and editor of the Chiny24.com portal. According to the International Monetary Fund, Latin America’s trade with China has grown from about $12.5 billion in 2000 to about $483 billion in 2022. China’s share of the region’s total trade volume has risen to 16% from 2% two decades ago, while the U.S. share has fallen from 52% to 39%. Today, a large portion of goods shipped from Latin America to the U.S. are made with raw materials, components and parts from China.

Source: Professor Jean-Paul Rodrigue, Texas A&M University – Galveston.
Panama fees up to 200%
In the case of the Panama Canal, the controversy in the US is the increasing TOLL fees for ship passage. TOLL is a fixed transit fee + capacity tariff (known as Panama Canal/Universal Measurement System tons) + various additional fees (e.g. reservation, inspection, security), explains Professor Jean-Paul Rodrigue, Texas A&M University – Galveston, and enumerates: fixed transit fees are divided into three classes: Regular ($60,000 for Panamax class ships and below), Super ($100,000 for Panamax-max ships) and Neopanamax ($300,000 for ships using the new locks). The capacity tariff is a function of the vessel’s cargo class (tanker, LNG, passenger), which is quoted in dollars per ton of PC/UMS of vessel capacity (or cubic meter for LNG).

For container ships, the Panama Canal transit charges are levied as follows: TOLL = Fixed Transit Fee + Total Allowable TEU Tariff (total TEU capacity of the vessel as defined by the Panama Canal) + Loaded TEU Tariff (loaded TEU above deck) + Empty TEU Tariff (empty TEU above deck) + Miscellaneous Charges. The fixed transit charges are the same as above. Capacity tariffs are quoted in USD per TEU.

Professor Rodrigue reminds us that “As of January 1, 2025, a new set of capacity tariff increases will come into effect, and they will be quite significant.” The graph he has developed shows the percentage increase from 2023 to 2025. He notes that fixed passage fees remain unchanged. In contrast, for cargo vessels, the increases in PC/UMS tariffs per ton are very significant, ranging from 18% to 220%. LNG cargoes have seen a 205% increase in PC/UMS tariffs per m3 in just 3 years.

Professor Rodrigue said on social media: “Given the importance of LNG, especially to Texas, one can be concerned about possible changes in cost structure and competitiveness.” For container vessel passages, there is no change in the Total TEU tariff, but tariffs per loaded TEU and tariffs per empty TEU are increasing by 12.5%-16.6% and 200% respectively (from $40 to $45 per TEU for loaded containers and $2 to $6 per TEU for empty containers). Given the structure of the US container trade, which requires significant repositioning of empty containers, this raises questions about the costs of the maritime supply chain. From the perspective of the United States, these increases can be seen as an inflationary factor. Transport costs are significant, given that the US administration has pledged to curb inflation and protect American economic interests.

Source: Harshad Shah, Why Trump Wants to Buy Greenland, Take Back the Panama Canal, and Merge Canada (Linkedin
Economy under customs protection
Donald Trump announced during the election campaign that he would protect the American economy with high tariffs. Although still lacking specifics, he proposed a tariff of over 60% on all Chinese goods, as well as a general tariff of 10% or 20% on all other goods imported to the US, CNN reported. Who will be affected by the tariffs?
The United States’ largest import from Canada is crude oil, which reached a record 4.3 million barrels per day in July 2024, according to data from the US Energy Information Administration. Americans also import cars, machinery and other goods from Canada, as well as plastics and wood, CNN reports, citing UN Comtrade. Most cars and car parts reach the US market from Mexico. The country overtook China as the leading exporter to the US in 2023, according to data from the Department of Commerce. Mexico is also a major supplier of electronics, machinery, oil and optical equipment. The southern neighbor is where much of the furniture and alcohol comes from. From China, the United States imports a significant amount of electronics, as well as machinery (including robots), toys, games, sports equipment, furniture, and plastics.

The United States’ trade deficit with China was $382.3 billion in 2022, up 8.3 percent ($29.4 billion) from 2021. U.S. services exports to China are estimated to have been $41.5 billion in 2022, up 5.2 percent ($2.1 billion) from 2021 and 39 percent from 2012 levels, according to data from the U.S. Department of Commerce.
The same department reports in a press release: “The total value of trade in goods and services between the United States and Canada in 2022 is estimated to have been $908.9 billion. Exports totaled $427.7 billion, and imports $481.2 billion. The U.S. trade deficit in goods and services with Canada was $53.5 billion in 2022.” U.S. exports of goods to Canada in 2022 reached $356.5 billion, an increase of 15.1% ($46.8 billion) from 2021 and 22% from 2012.
U.S. imports of goods from Canada totaled $436.6 billion in 2022, an increase of 22.2% ($79.3 billion) from 2021 and 35% from 2012. U.S. exports to Canada account for 17.3% of U.S. exports. of total U.S. exports in 2022. The U.S. trade deficit in goods with Canada was $80.1 billion in 2022, an increase of 68.0% ($32.4 billion) compared to 2021.
– Total trade in goods and services between the United States and Mexico is estimated at $855.1 billion in 2022. Exports were $362 billion, and imports were $493.1 billion. The U.S. trade deficit in goods and services with Mexico was $131.1 billion in 2022, the U.S. Department of Commerce reports.

U.S. exports of goods to Mexico in 2022 were $324.3 billion, an increase of 17.0%. ($47.2 billion) compared to 2021 and a 50% increase compared to 2012. U.S. imports of goods from Mexico totaled $454.8 billion in 2022, an 18.9% increase ($72.2 billion) compared to 2021 and a 64% increase compared to 2012. U.S. exports to Mexico account for 15.7% of total U.S. exports in 2022. The U.S. trade deficit in goods with Mexico was $130.5 billion in 2022, an increase of 23.7% ($25.0 billion) compared to 2021. Raising tariffs on trade with these economies could be an opportunity for the Polish economy. The Polish market could become a supply market for the United States for items whose prices will increase as a result of the tariff policies of Panama and the United States. Goods manufactured in Poland can be exported to the American market through ports, which should benefit from the revival of Polish-American cooperation, which is currently mainly burdened by LNG imports.
In 2022, we recorded record trade turnover between Poland and the United States, which reached USD 27.2 billion (compared to USD 19.5 billion in 2021; export in 2022 amounted to USD 10.8 billion, import USD 16.4 billion). In 2023, Poland imported products and services worth around USD 13.2 billion, and by September 2024 around USD 11.3 billion. Polish exports across the Atlantic reached a value of almost USD 11.47 in 2023, and by September 2024 approached USD 11 billion. These are amounts that have a chance to increase thanks to Donald Trump’s protectionist policy.