President-elect Donald Trump has threatened to take control of the Panama Canal unless Panamanian authorities stop charging excessive fees for use of the bottleneck.

“Has anyone ever heard of the Panama Canal?” Trump said this at a conservative event in Arizona, as quoted by Reuters. “Because we’re getting ripped off at the Panama Canal, just like we’re getting ripped off everywhere.”

“It was given to Panama and the people of Panama, but it has provisions in it,” Trump continued about the Panama Canal. “If the moral and legal principles of this generous gesture of giving are not followed, we will demand that the Panama Canal be returned to us in full, quickly and without questions,” Trump said.

The statements prompted an immediate reaction from Panama’s President Jose Raul Mulino said that Panama’s sovereignty was non-negotiable and that Panama had sole authority over infrastructure.

“Every square meter of the Panama Canal and its adjacent territories belongs to Panama and will continue to belong to Panama,” Mulino said, adding: “The canal is not subject to direct or indirect control by China, the European Union, the United States or any other power . As a Panamanian, I reject any statement that misrepresents this reality.”

The latter comments came in response to Trump’s suggestion that the management of the Panama Canal was influenced by Chinese interests. A subsidiary of a Hong Kong-based company manages two ports along the Panama Canal, according to Reuters.

The canal was built by the United States in the early 20th century. Panama granted the United States the right to build and operate the canal in exchange for annual payments. The ownership of the infrastructure was passed to the Panamanian government in 1977 by President Jimmy Carter. The agreement gave the local government control of the Panama Canal under the obligation to maintain its neutrality.

By Irina Slav for Oilprice.com

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