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.

The Trump administration is taking proactive measures to regain control over the Panama Canal and reduce Chinese influence at its ports.

Aside from the US President's bluster, there are genuine concerns about Chinese influence over the vital waterway.

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.

Secretary of State Marco Rubio says President Donald Trump’s desire to acquire Greenland and retake control of the Panama Canal is driven by legitimate national security interests stemming from growing concerns about Chinese activity in the Arctic and in Latin America.

Panama's decision to leave a key investment deal with China has drawn accusations from Beijing of "pressure and coercion" by the Trump administration.

In response to pressure from the Trump administration, Panama has withdrawn from China’s Belt and Road Initiative.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