In short:
President-elect Donald Trump has threatened to retake control of the Panama Canal.
Speaking at an event organised by conservative ally Turning Point, he claimed the US is being "ripped off" with excessive rates.
Panama's President José Raúl Mulino said Panama's independence was "non-negotiable".
Donald Trump has threatened to reassert US control over the Panama Canal, accusing the nation of charging excessive rates to use the passage.
Speaking to a crowd of supporters in Arizona, the president-elect also said he would not let the canal fall into the "wrong hands", warning of potential Chinese influence.
After the event, he posted an image on Truth Social of an American flag flying over a narrow body of water, with the comment: "Welcome to the United States Canal!"
"Has anyone ever heard of the Panama Canal?" he said 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."
Trump's comments were an exceedingly rare example of a US leader saying he could push a sovereign nation to hand over territory.
They also underlined an expected shift in US diplomacy under Trump, who has not historically shied away from threatening allies and using bellicose rhetoric when dealing with counterparts.
The president-elect doubled down on his suggestion to retake control of the canal with a post to Truth Social. (Donald Trump via Truth Social)
"It was given to Panama and the people of Panama, but it has provisions," he continued.
The canal was once owned by the United States but was handed over to Panama decades ago.
"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," Trump said.
Rates not set 'on a whim'
In a recorded message released by Panama's President José Raúl Mulino on Sunday afternoon, the nation's leader said Panama's independence was non-negotiable and 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".
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 canal's Caribbean and Pacific entrances.
"Every square meter 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 X.
Trump then responded to Mr Mulino with another post to Truth Social: "We'll see about that!"
Musings of territory expansion
It's not clear how Trump would seek to regain control over the canal, and he would have no recourse under international law if he decided to make a play for the passage.
This is not the first time Trump has openly considered territorial expansion.
In recent weeks, he has repeatedly mused about turning Canada into a US state, though it is unclear how serious he is about the matter.
During his 2017-2021 term, Trump expressed interest in buying Greenland, an autonomous territory of Denmark.
He was publicly rebuffed by Danish authorities before any conversations could take place.
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When did Panama take control of the canal?
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 United States handed over control of the passage in 1999 after a period of joint administration.
Thousands of container ships cross the Panama Canal each year. (Reuters: Enea Lebrun)
Why did the US give up control?
Tensions between the US and Panama over control of the passage grew as the 20th century progressed.
Many Panamanians questioned the validity of the 1903 treaty that first gave the US the rights to build and operate the canal in their nation.
A riot was sparked in 1964 over the right to fly the Panamanian flag in the Canal Zone, which caused a brief breakdown of diplomatic relations between the two countries.
Despite this, the US Office of the Historian says both sides saw the need for a new agreement to be struck over the canal's control.
In 1975, then-secretary of state Henry Kissinger laid out his reasoning for a treaty to then-president Gerald Ford.
"If these [canal] negotiations fail, we will be beaten to death in every international forum and there will be riots all over Latin America," Mr Kissinger said.
But leadership changes and political uncertainty meant it took years for a new agreement to be ratified.
How many ships go through the Panama Canal?
The waterway allows up to 14,000 ships to cross each year, accounting for 2.5 per cent of global seaborne trade.
It is critical to US imports of auto and commercial goods by container ships from Asia, and for US exports of commodities, including liquefied natural gas.
ABC/Reuters
