The correct answer is A) the squat is additive. When two vessels are proceeding in opposite directions in a narrow channel, the interaction between the two vessels' hulls and the restricted waterway can cause an increase in the squat (the lowering of a vessel's stern as it moves through the water) of both vessels. This is known as the "bank effect" or "bank suction" phenomenon. The squat of each vessel is increased due to the constriction of the waterway, resulting in an additive effect on the overall squat experienced by both vessels. The other options are incorrect because B) the squat is not subtractive, as the interaction between the vessels increases the squat; C) the squat does not remain the same, as it is increased due to the bank effect; and D) the squat is not cancelled out, but rather additively increased.