Missing Link
A competitor to the Panama Canal might finally get built in Mexico.
Programming Note: After submitting many requests for such a feature, paid subscribers can now save and print formatted PDFs of each Doomberg article for offline reading.
To do so, click the 3-dots (...) to the right of the Share button above. The resulting menu will provide an option to "Open as PDF."
“You can't cross the sea merely by standing and staring at the water.” – Rabindranath Tagore
From northern Alaska to the southern reaches of Mexico extends a nearly continuous chain of mountains known as the North American Cordillera. The Cordillera serves as a barrier that influences weather systems, human settlement patterns, and trade flows. It contains the Continental Divide, partitioning watersheds into those that ultimately drain into the Pacific and Atlantic Oceans. For centuries, passing from one side of this natural barricade to the other was perilous—except for one small break in the range.
Across the Mexican states of Oaxaca and Veracruz lies the Isthmus of Tehuantepec, a stretch of lowlands that marks the shortest distance between the Atlantic and Pacific Oceans in the country. Its narrowest point, 137 miles from coast to coast, is also its lowest at only 735 feet above sea level. This land bridge, named Chivela Pass after a nearby town, has long intrigued planners and strategists seeking interoceanic trade routes to facilitate global commerce.
On January 23, 1907, after decades of misfires and setbacks suffered by a string of developers, Sir Weetman D. Pearson (also known as Lord Cowdray) officially opened a rail connection across the Isthmus. The first shipment to utilize the new passage was an 11,500-ton load of sugar from Hawaii, delivered to the Port of Salina Cruz. Railcars then transported the cargo to the Port of Coatzacoalcos, located on what was then called the Gulf of Mexico. The Tehuantepec Railway operated profitably for several years until the opening of the Panama Canal in 1914, which led to its irrelevance and decline.
It already seems like forever ago that Donald “The Whirlwind” Trump vocally demanded the return of the Panama Canal to the US, declaring, “We didn't give it to China. We gave it to Panama, and we're taking it back.” Given the flurry of tectonic-plate-shifting moves being made on what seems like an hourly basis, it is hard to know where this particular repo job ranks among his current priorities. Untidy loose ends notwithstanding, a clear pattern has emerged: Trump is giving up on the concept of unipolarity, walking away from Europe, and refocusing US foreign policy on the Western Hemisphere.
In our continuing objective to anticipate future trends before they become mainstream, we have pondered what Trump 2.0 means for Mexico, a country that has not yet—at least at the time of this writing—been identified as the future 52nd state. For all of Trump’s talk of tariffs and military engagement with Mexican drug cartels, he remains, above all, a real estate developer, and few plots of land seem more ripe for development than the Isthmus of Tehuantepec.
Former Mexican President Andrés Manuel López Obrador (AMLO) revitalized Mexico’s longstanding ambition to establish a viable alternative to the Panama Canal in the Isthmus during his tenure, a project now inherited by his successor, Claudia Sheinbaum. As the two countries prepare to renegotiate trade flows, the prospect of collaborating on a transformative megaproject might prove irresistible to Trump. Let’s explore the ultimate vision, measure current progress against it, and assess the potential impact on the global economy.