*

Trump said he will not let the canal fall into the 'wrong

hands'

*

Trump accused Panama of charging excessive fees to use the

canal

*

Panama's President Mulino defends canal's independence and

fees

*

US handed over control of the canal in 1999

(Adds comments from Panamanian presidents in paragraphs 9-11)

By Gram Slattery

WEST PALM BEACH, Florida, Dec 22 (Reuters) -

P resident-elect Donald Trump threatened to reassert U.S. control

over the Panama Canal on Sunday, accusing Panama of charging

excessive rates to use the Central American passage and drawing

a sharp rebuke from Panamanian President Jose Raul Mulino.

Speaking to a crowd of supporters in Arizona on Sunday,

Trump also 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 ( CKHUF )

has long managed two ports located on the Caribbean and Pacific

entrances to the canal.

The president-elect's comments came hours after he leveled a

similar threat against Panama in a post on Truth Social on

Saturday night.

"Has anyone ever heard of the Panama Canal?" Trump said on

Sunday at AmericaFest, an annual event organized 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 U.S.

leader saying he could push a sovereign country to hand over

territory. It also underlines an expected shift in U.S.

diplomacy under 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," 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 Mulino

on Sunday afternoon, the nation's leader 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),"

Mulino said in the statement, which was released on X.

Several other Panamanian politicians, including members of

the opposition, also took to social media to criticize Trump's

statements.

The United States largely built the canal and administered

territory surrounding the passage for decades. But the United

States 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.

The waterway, which allows up to 14,000 ships to cross per

year, accounts for 2.5% of global seaborne trade and is critical

to U.S. imports of autos and commercial goods by container ships

from Asia, and for U.S. exports of commodities, including

liquefied natural gas.

It is 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 U.S. 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.