Trump reiterated his claim that China is “operating” the Panama Canal and said that the critical waterway had been “foolishly” given to Panama. “We didn't give it to China. We gave it to Panama, and we’re taking it back.”

Vice President Han Zheng will represent China at Donald Trump's inauguration on Monday, signalling a potential thaw in Washington-Beijing relations.View on euronews

Speaking during his inaugural address, President Trump vowed to rename the Gulf of Mexico the "Gulf of America," return Alaska's Denali to "Mount McKinley" and retake control of the Panama Canal.

The new administration sees Chinese-owned infrastructure as leverage over the waterway. Panama and some former U.S. military officials say concerns are overblown.

In his speech, Trump said the U.S. will attempt to reassert control over the Panama Canal, claiming that China is giving preferential treatment over the crucial waterway bridging the Atlantic and Pacific oceans.

President Donald Trump used his inaugural speech on Monday to attack a U.S. ally, falsely claiming that China now controls the Panama Canal — it is in fact managed by an independent agency of the Panamanian government — and appearing to threaten war to seize it back.