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.

President Trump is wrong when he says China controls the Panama Canal. But the U.S. rival does have influence there, and the administration is moving to counter it.

Panama's José Raúl Mulino announced that his country would not renew its agreement with China's Belt and Road Initiative following a visit from Secretary of State Marco Rubio.

China's foreign ministry said on Wednesday it had lodged complaints with the United States over "irresponsible" remarks regarding the Panama Canal and "attacks" on China's cooperation with Panama over the canal.

US Secretary of State Marco Rubio has demanded that Panama make "immediate changes" to what he calls the "influence and control" of China over the Panama Canal. America's top diplomat said Panama must act or the US would take necessary measures to protect its rights under a treaty between the two countries.

Some U.S. lawmakers and officials are touting a nearly half-century-old treaty between the United States and Panama to justify

China is working on a cross-continental infrastructure and now that Panama has backed out, they blame the US for running interference by means of intimidation.

In response to pressure from the Trump administration, Panama has withdrawn from China’s Belt and Road Initiative.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.

U.S. President Donald Trump has postponed a phone call with Panamanian President Jose Raul Mulino due to last-minute changes in the U.S. leader's agenda, Panama's government said on Friday, amid tensions over U.