*

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 Trump comment on Greenland in final two paragraphs)

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, Trump also

said he would not let the canal fall into the "wrong hands,"

warning of potential Chinese influence on the passage.

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?" Trump said 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. They also underlined 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.

"It was given to Panama and the people of Panama, but it has

provisions," Trump said of the canal, which 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."

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".

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 canal's Caribbean and

Pacific entrances.

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.

"Every square meter of the Panama Canal and the surrounding

area belongs to Panama and will continue belonging (to Panama),"

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

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

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.

Trump repeated the idea on Sunday, in a statement announcing

his pick for ambassador to Denmark, Ken Howery, a former

ambassador to Sweden.

"For purposes of National Security and Freedom throughout

the World, the United States of America feels that the ownership

and control of Greenland is an absolute necessity," he wrote on

Truth Social.