US President Donald Trump's threat to seize the Panama Canal over alleged undue Chinese influence may really be aimed at limiting Beijing's growing diplomatic and economic presence in Latin America, experts say.

Panama has reportedly submitted a formal letter to the U.N. rejecting Trump's statement about reclaiming the canal. The country's President José Raúl Mulino said in the letter, dated January 20, that the canal "is and will continue to be Panama's," the New York Times reported.

Beijing’s efforts to expand its reach in the country have hit several obstacles, in part because of American pressure.

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.

I really feel uncomfortable because it’s like when you’re big and you take a candy from a little kid,” one resident said.

President-elect Donald J. Trump’s threat to take back the Panama Canal may be posturing, but it could dampen the Panamanian government’s wish to broaden relations with the United States, analysts say.

Donald Trump would have no recourse under international law if he decided to make a play for the passage, and Panama's president has rejected the US president's words, saying no nation "interferes with our administration".

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

The [Panama government] needs concrete data to counter this China is controlling the canal narrative,’ insider says.

William McKinley, the 25th president, loved tariffs and expanded American territory. What more do you need to know?

In his inaugural address, US President Donald Trump promised to "take back" the "foolish gift" from the United States that was the Panama Canal. But was it in fact a gift? And does China really control it as he claims?