Panama Canal: President-elect Donald Trump threatens to retake control of Panama Canal

President-elect Donald Trump has drawn a sharp rebuke from the Panamanian president after threatening to reassert US control over the Panama Canal, saying the US was being “ripped off”.

Speaking to a crowd of supporters in Arizona on Sunday, the US president-elect said he would not let the canal fall into the “wrong hands”, warning of potential Chinese influence on the passage.

China does not control or administer the canal, but a subsidiary of Hong Kong-based CK Hutchison Holdings has long managed two ports located on the Caribbean and Pacific entrances to the canal.

Mr Trump’s comments came hours after he levelled a similar threat against Panama in a post on Truth Social on Saturday.

“Has anyone ever heard of the Panama Canal?” Mr Trump said on Sunday at AmericaFest, an annual event organised by Turning Point, an allied conservative group.

“Because we’re being ripped off at the Panama Canal like we’re being ripped off everywhere else.”

Mr Trump’s comments were an exceedingly rare example of a US leader saying he could push a sovereign country to hand over territory. It also underlines an expected shift in US diplomacy under Mr Trump, who has not historically shied away from threatening allies and using bellicose rhetoric when dealing with counterparts.

“The fees being charged by Panama are ridiculous, highly unfair,” Mr Trump said.

“It was given to Panama and the people of Panama, but it has provisions. You get to treat us fairly, and they haven’t treated us fairly. If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, quickly and without question.”

In a recorded message released by Panama’s President Jose Raul Mulino on Sunday he said that Panama’s independence was non-negotiable and that China had no influence on the canal’s administration. He also defended the passage rates Panama charged, saying they were not set “on a whim”.

“Every square meter of the Panama Canal and the surrounding area belongs to Panama and will continue belonging (to Panama),” Mr Mulino said in the statement, which was released on X.

The US largely built the canal and administered territory surrounding the passage for decades.

But the US and Panama signed a pair of accords in 1977 that paved the way for the canal’s return to full Panamanian control. The US handed over control of the passage in 1999 after a period of joint administration.

The waterway, which allows up to 14,000 ships to cross per year, accounts for 2.5 per cent of global seaborne trade and is critical to US imports of autos and commercial goods by container ships from Asia, and for US exports of commodities, including liquefied natural gas.

Mr Trump would have no recourse under international law if he decided to make a play for the passage.

This is not the first time Mr Trump has openly considered territorial expansion.

Recently he has repeatedly mused about turning Canada into a US state and during his 2017-2021 term, he expressed interest in buying Greenland, an autonomous territory of Denmark.