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.

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In response to pressure from the Trump administration, Panama has withdrawn from China’s Belt and Road Initiative.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

The US president's tariff strategy has so far forced Mexico, Canada, Colombia and Panama to toe the line. Mexico and Canada this week promised to shore up security at their US borders to tackle illegal migration and drug trafficking.

Mr Trump has made clear that he sees tariffs as a way to incentivise foreign investment in America and boost production at home. “It’s going to mean a lot of businesses are going to be opening in the United States,

Donald Trump has praised Anthony Albanese as a "very fine man", as the prime minister seeks to get an exemption to steel and aluminium tariffs.