Donald Trump threatens to retake Panama Canal and claims US is being 'ripped off'

Donald Trump has threatened to retake control of the Panama Canal - accusing Panama of charging excessive rates to use the crucial trade passage and warning of potential Chinese influence.

The outburst from the president-elect has sparked a row with the leader of the Central American country, who defended the canal's independence.

Speaking to a crowd in Arizona, Mr Trump said he would not let the canal - which has been under Panamanian control for decades - fall into the "wrong hands".

"Has anyone ever heard of the Panama Canal?" Trump asked supporters at AmericaFest on Sunday.

"Because we're being ripped off at the Panama Canal like we're being ripped off everywhere else."

A critical waterway for world trade, the canal connects the Atlantic and Pacific oceans and allows ships to avoid lengthy and hazardous journeys around the southernmost tip of South America by cutting through the middle of the Americas.

After the ambitious project was opened in 1914, the canal and surrounding territory were controlled by the US until an agreement with Panama in 1977 paved the way for it to return to full Panamanian control in 1999.

"It was given to Panama and the people of Panama, but it has provisions," Mr Trump said. "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."

It's not clear how Mr Trump would go about reasserting US control over the canal.

Read more:
Trump appoints producer as UK special envoy
US government avoids shutdown

Panama's President Jose Raul Mulino said his country's independence was non-negotiable and that China had no influence on the canal's administration.

China does not control the canal but a subsidiary of Hong Kong-based CK Hutchison Holdings has long managed two ports at the canal's Caribbean and Pacific entrances.

"Every square metre of the Panama Canal and the surrounding area belongs to Panama and will continue belonging (to Panama)," Mr Mulino said in his statement, which was released on social media.

Mr Trump then responded: "We'll see about that!"

Mexico's President Claudia Sheinbaum expressed her support for Panama's government after Mr Trump's remarks.

"Indeed, the Panama Canal belongs to the Panamanians," she during her regular morning press conference.

The Panama Canal allows up to 14,000 ships to cross each year and accounts for some 2.5% of global seaborne trade.

In recent weeks, Mr Trump has repeatedly mused about turning Canada into a US state and in the past has expressed interest in buying Greenland.

(c) Sky News 2024: Donald Trump threatens to retake Panama Canal and claims US is being 'ripped off'