by Sebastien GOULARD
The Tehuantepec Corridor
While the U.S. President has reiterated his intention to reclaim control over the Panama Canal, Mexico has inaugurated its own route connecting the Atlantic and Pacific Oceans.
Controlling maritime straits and canals means mastering global trade. Today, nearly 90% of global trade is conducted via sea routes. Although continental alternatives exist, such as the new Silk Road railways, maritime routes remain essential to global supply chains. When tensions arise—such as those in the Red Sea—the entire global economy feels the impact.
The Suez Canal, the Strait of Malacca, and the Panama Canal are strategic chokepoints for world trade. It is in order to secure its supply lines that the United States seeks to regain control over the Panama Canal. For the same reason, Beijing is reluctant to approve the sale of the Panama Canal port, operated by the Hong Kong-based CK Hutchison Holdings, to a foreign company.
It is against this backdrop of rising tensions that, in early April, Mexico inaugurated an alternative to the Panama Canal: the Interoceanic Corridor of the Isthmus of Tehuantepec (Corredor Interoceánico del Istmo de Tehuantepec-CIIT). This corridor links the port of Salina Cruz on the Pacific coast to the port of Coatzacoalcos on the Gulf of Mexico. Strictly speaking, it is not a canal but an intermodal maritime and rail corridor. In early April, 900 Hyundai vehicles crossed the Tehuantepec Isthmus en route to the U.S. market after being unloaded at the port of Salina Cruz and transported by rail over 300 kilometers to the port of Coatzacoalcos.
With this new corridor, Mexico is reviving the interoceanic line envisioned by President Porfirio Díaz at the beginning of the 20th century, which faded from relevance with the rise of the Panama Canal.
The operation conducted in early April was merely a test. Mexico must now define a viable economic model to ensure the sustainability of the corridor. The corridor’s current capacity is limited and would not meet high demand. Should the project move forward, it could make the Tehuantepec Isthmus region more attractive to investors. This would require new infrastructure and training policies to involve local communities in the region’s development. The CIIT runs through the state of Oaxaca, one of the country’s poorest states. Several industrial sites are expected to be built along the corridor, which should stimulate the local economy.
Other Projects
The CIIT is not intended to replace the Panama Canal, which remains a strategic route between the Pacific and Atlantic Oceans, but rather to complement it. Due to heavy traffic, the Panama Canal faces congestion issues, which result in delays. The CIIT is expected to reduce transit times.
However, the success of the CIIT will largely depend on the health of global trade and on U.S. trade policy. The new Mexican corridor aims to capture part of the cargo flows from Asia to the U.S. East Coast. If President Trump continues his tariff policy against Asian economies, the CIIT could suffer from a significant drop in activity.
Other projects in Central America aim to provide alternatives to the Panama Canal. These include a proposed “dry” canal crossing Honduras and El Salvador, another in Guatemala, and a canal project in Nicaragua. The latter was first envisioned in the 19th century but was revived in the early 2000s by the Nicaraguan government. It had sought partnerships with Chinese companies, but the project’s scale and local opposition—due to planned expropriations—led to its abandonment in 2018. However, in November 2024, Nicaragua announced it was once again considering building a canal between the Pacific and Atlantic.
To make these projects viable, greater regional coordination will be required to prioritize initiatives. They will also need U.S. support, as Central American markets alone are insufficient to sustain such infrastructure. In the summer of 2024, a Mexican delegation traveled to Washington to present the CIIT project to U.S. authorities. Going forward, engagement with the Trump administration will be essential.
Author: Dr. Sebastien Goulard is the founder and editor-in-chief of Global Connectivities.
