Trump issued the threat without explaining details after weeks of refusing to rule out military action against Panama over the waterway, which the United States handed over at the end of 1999.
“Above all, China is operating the Panama Canal, and we didn’t give it to China, we gave it to Panama. And we’re taking it back,” Trump said after being sworn in inside the US Capitol.
Panama maintains control of the canal but Chinese companies have been steadily increasing their presence around the vital shipping link between the Atlantic and Pacific oceans.
Panamanian President Jose Raul Mulino swiftly denied that any other nation was interfering in the canal, which he said his country operated with a principle of neutrality.
“The canal is and will remain Panama’s,” Mulino said, calling for dialogue to address any issues.
At his inauguration, Trump said that the United States has been “treated very badly from this foolish gift that should have never been made.”
“The purpose of our deal and the spirit of our treaty has been totally violated. American ships are being severely overcharged and not treated fairly in any way, shape or form, and that includes the United States Navy,” he said.
Marco Rubio, the new secretary of state, stopped short of threatening military action during his confirmation hearing last week but warned that China through its influence could effectively shut down the Panama Canal to the United States in a crisis.
The Senate on Monday unanimously confirmed Rubio, a fellow senator, who becomes the first Hispanic and first fluent Spanish speaker as top US diplomat.