Donald Trump has begun his second term as president by ramping up pressure on Panama – threatening to “take back” the Panama Canal and accusing the country of ceding control of the strategically critical waterway to a US rival: China.

In response to pressure from the Trump administration, Panama has withdrawn from China’s Belt and Road Initiative. Eric Olander, co-founder of the China-Global South Project, says the U.S. president will likely feel emboldened to seek similar leverage from the more than 100 other countries that are still part of Beijing's infrastructure project.

By Frankie Mills Panama has strongly rejected US claims about securing free passage for government vessels through the Panama Canal, whilst announcing its withdrawal from China's Belt and Road Initiative amidst growing US pressure over alleged Chinese influence in the region.

The Panama Canal Authority late Wednesday said it has made no change to its tolls or other fees, denying the Trump administration claim that it has agreed to no longer charge U.S. government vessels for using it.

Panama's foreign office will share details on the new date once it has been coordinated, the government said. Mulino has accused the U.S. of spreading "lies and falsehoods" after its government claimed its vessels would be able to pass through the Panama Canal without paying.