DONALD TRUMP suggested on Sunday that his new administration could try to regain control of the Panama Canal that the United States “foolishly” ceded to its central American ally.

The US president-elect argued that “ridiculous” fees are charged for ships to pass through the channel linking the Atlantic and Pacific Oceans.

Panama’s right-wing President Jose Raul Mulino rejected that notion as an affront to his country’s sovereignty.

Mr Trump told the Turning Point USA’s AmericaFest in Arizona that “we’re being ripped off at the Panama Canal,” saying that the country “foolishly gave it away.”

The US built the canal in the early 1900s but gave up control to Panama on December 31 1999, under a treaty signed in 1977 by President Jimmy Carter.

Mr Trump said: “If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to the US, in full, quickly and without question.

“I’m not going to stand for it,” Mr Trump said. “So to the officials of Panama, please be guided accordingly.”

Shortly after Mr Trump’s speech, President Mulino released a video declaring that “every square metre of the canal belongs to Panama and will continue to belong” to his country.