This study examines how climate-related disruptions in the Panama Canal can generate indirect effects on third economies, focusing on grain trade between the United States, Brazil, and China. The analysis centers on the 2023 drought, one of the most severe droughts recorded in the Panama Canal watershed, and its interaction with El Niño conditions. Using AIS-derived trade statistics and a difference-in-differences approach, the results show that ENSO-related drought affected soybean throughput through the Panama Canal. These effects are interpreted through changes in reservation costs, auction mechanisms, and transit uncertainty, which force the adjustment of trade patterns. The evidence indicates that the impact was especially visible in grain exports from the United States to East Asia. During the disruption period, cargo flow estimates show that grain movements from the United States to China declined relative to Brazil-China flows, which are used as a comparison group. This comparison is relevant because China has historically used soybean purchases as a lever in trade and geopolitical negotiations with the United States. The estimated reduction in cargo volume from the United States is approximately 23%, suggesting that Canal restrictions affected not only transit times and shipping costs, but also the relative competitiveness of U.S. exporters. The economic effects documented here may therefore offer one plausible explanation for why the Canal has re-entered discussions about control, access, and U.S.–China influence.

Keywords 

Panama Canal; climate disruption; maritime chokepoints; soybean trade.