The El Niño weather pattern of 2026-27 is shaping up to be among the strongest in living memory, roiling industries across the global economy, the WSJ's Ed Ballard and Costas Paris write. It is showing up in the cost of transiting the Panama Canal and in Chilean copper output, and could influence everything from Asia's rice crop to the powder at Colorado ski resorts.
Among those bracing for impact are shipping companies using the Panama Canal, a chokepoint that is tightening just as shipping is throttled from the Strait of Hormuz to the parched Rhine. The Panama Canal Authority plans to reduce the maximum number of vessel transits, and the average auction price for ships using the largest locks has surged.
Elsewhere, excess precipitation is the problem. Chilean copper producer Antofagasta cut its production forecast after a powerful storm stopped operations at its Los Pelambres mine in July, squeezing an already tight market.
Economists say the overall impact of the weather phenomenon is likely to be slower growth and more inflation, notably in Asia's emerging economies.
Europe has endured punishing heatwaves, wildfires and rivers running dry this summer, foreshadowing how the shifting climate will change the continent's business as usual. (WSJ)
The Panama Canal Authority adjusted its booking system for Neopanamax vessels to increase flexibility for the largest ships as capacity reductions loom with a strong El Niño bearing down. (Maritime Executive)
Number of the Day
Gallons of water lost whenever a ship passes through the Panama Canal, which is replenished by Lake Gatún, its main reservoir.
Global Trade
Many small and midsize Canadian business owners producing everything from honey to art to cosmetics are expected to bear the brunt of the pain from President Trump's new tariffs, the Journal's Amanda Coletta writes.
The Canadian economy as a whole is projected to withstand the new tariffs of 50% on $20 billion worth of Canadian goods, or about 5% of Canada's U.S.-bound exports. But some smaller enterprises fear they could be put out of business without a resolution to the trade spat.
In a Canadian Federation of Independent Business survey released this month, 40% of exporters reported that they sold products targeted by the tariffs. Of them, nearly 80% said they expected revenue losses if the tariffs were imposed; more than one-third estimated revenue losses of at least 50%.
Economists at Desjardins Group estimate that the Canadian unemployment rate could climb to 7% by year-end from 6.4% in July, if tariffs are kept in place on both sides of the border. Another economist projects the tariffs could cost 90,000 jobs.
Canada's gross domestic product grew at an annualized rate of 3.3% in the second quarter. (WSJ)
U.S. tariffs imposed by President Trump are hitting the conservative heavy-machinery hub of Piracicaba, Brazil. (WSJ)
The Port of Prince Rupert has completed work on the Canxport transload facility to give carriers more backhaul freight amid Canada's efforts to reduce trade dependence on the U.S. (Journal of Commerce)
In Other News
The Bureau of Labor Statistics said the U.S. likely added 79,000 fewer jobs than previously reported over the 12 months that ended in March. (WSJ)
Consumer sentiment worsened in August, confirming its preliminary reading earlier this month, according to the University of Michigan's monthly survey. (WSJ)
The European Commission's eurozone economic confidence gauge rose to 98.4 in August from 97.1 in July, beating economists' expectations. (WSJ)
China's official manufacturing purchasing managers index rose to 49.8 in August from 49.2 in July, beating expectations of 49.5. (WSJ)
The U.S. government reached a deal to take a 35% passive stake in North American Blue Energy Partners, a private company with Venezuelan oil rights. (WSJ)
Thousands of drivers have filed complaints with U.S. auto-safety regulators describing incidents in which their sunroofs unexpectedly exploded or shattered, often while they were driving. (WSJ)
A federal judge ruled the Trump administration violated Anthropic's First Amendment rights by blacklisting the AI company as a supply-chain risk. (WSJ)
BYD's quarterly profit rebounded despite slightly lower revenue, showing that the Chinese EV seller may have turned a corner with the help of its rapid expansion overseas. (WSJ)
Andreessen Horowitz raised $1.1 billion for its first dedicated hardware-infrastructure fund, dubbed Machine Age, which will focus on investments in AI-related equipment. (WSJ)
The Port of Los Angeles approved a 30-year lease with Yusen Terminals, a unit of Japan's Ocean Network Express, clearing the way for a $200 million investment in zero-emission equipment. (DC Velocity)
Walmart plans to build a 1.5-million-square-foot automated fulfillment center in Carnesville, Ga. (SupplyChainDive)
Microsoft is using more than 25 AI agents and other applications to find opportunities to cut costs in its supply chain. (SupplyChainBrain)
Colorado, Idaho and Michigan stopped issuing non-domiciled commercial driver licenses or commercial learner permits, amid a federal crackdown on immigrant truckers. (Transport Topics)
Vice President JD Vance and EPA Administrator Lee Zeldin called for a probe into the Biden administration's response to the 2023 Norfolk Southern derailment in East Palestine, Ohio. (TrainsPRO)
About Us
Mark R. Long is editor of WSJ Logistics Report. Reach him at mark.long@wsj.com. Follow the WSJ Logistics Report team on LinkedIn: Mark R. Long, Liz Young and Paul Berger.
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