By Gram Slattery and Tim Reid
WEST PALM BEACH, Florida (Reuters) - Donald Trump's surprise threat to retake control of the Panama Canal and his expansionist declaration that the United States should own Greenland signals that the incoming U.S. president will pursue a foreign policy unbound by diplomatic niceties.
As Trump prepares to take office on Jan. 20, his aides have been preparing him to deal with two foreign policy crises: war in Ukraine and multiple conflicts in the Middle East, both of which the president-elect has promised to speedily resolve.
But on Sunday, Trump was more focused on making threats against U.S. allies like Panama and Denmark, which controls Greenland as an overseas territory. In previous weeks, it has been Canada which has had to weather his trolling that it should become the 51st state of the United States.
Defenders of Trump's approach say he is merely a forceful advocate of "America First" policies. That means brusquely defending America's interests - economic or otherwise - when dealing with friends and largely disregarding consequences allies may face.
"The idea is that what's good for America is good for the rest of the world," said Victoria Coates, a high-ranking national security official during Trump's 2017-2021 term. "So he takes a clear-eyed look at what are America's interests in any given situation."
In the case of Panama, Trump said the United States should reassert control of the vital Central American waterway because Panama was charging shippers too much to use it, an allegation the Panamanian president vehemently denied.
Speaking to a crowd of supporters in Arizona, Trump also said he would not let the canal fall into the "wrong hands," warning of potential Chinese influence on the passage.
Two Trump foreign policy advisers, speaking on condition of anonymity, argued he was addressing a larger issue, one which they expect to be a focus of his second term: Growing Chinese influence over governments and economies in Latin America.
China does not control or administer the canal, but a subsidiary of Hong Kong-based CK Hutchison Holdings has long managed two ports located on the canal's Caribbean and Pacific entrances.
"It's all about leverage and flexing. The number two user of the Panama Canal is China and he's trying to thwart their influence in Latin America," said Tricia McLaughlin, an adviser to Vivek Ramaswamy, Trump's choice to co-chair a government efficiency commission with the CEO of Tesla (NASDAQ:TSLA) Elon Musk.
Detractors point out his approach risks alienating key allies.
In some cases, public bullying could push natural friends into the orbit of competing major powers, like China and Russia, or make them less likely to strike an economic or security-focused deal with the U.S., they say.
Mayer Mizrachi Matalon, the conservative mayor of Panama City who has worn a Trump "Make America Great Again" hat, issued a blistering statement on Sunday. "We are not, nor will we ever be, a 51st state," he said.
John Bolton, Trump's national security adviser in his first term who has since turned on the former president, said there are legitimate debates over the premiums Panama charges for passage through the canal, and also Greenland's strategic importance to the U.S. and NATO.
But, he added, Trump is endangering the chance to have those discussions "because he couldn't keep his mouth shut."
Trump was not averse to rebuking or threatening allies during his first term, especially European members of NATO, who Trump accused of spending too little on the alliance's military defense.
Yet threatening such geographically close allies such as Canada and Panama weeks before he even takes office appears to show a greater willingness to use U.S. power as a blunt instrument to extract concessions.
The White House declined to comment. Trump's transition team did not respond to a request for comment.
TRUMP STILL WANTS GREENLAND
On Sunday, Trump also resurrected in a statement an idea he floated during his first term - that the U.S. should buy Greenland, which has become an increasingly important strategic territory as Arctic trading routes open up due to climate change.
Some officials involved in the transition or close to Trump have informally discussed in recent weeks what an acquisition of the Danish territory would look like, three of those people told Reuters.
One potential option would be signing with Greenland a Compact of Free Association, or COFA, should the island become fully independent of Denmark, which some polls have shown Greenlanders' support in the long term.
Under a COFA, which the United States currently holds with three Pacific island states, there is an extremely high degree of economic integration between the U.S. and the relevant foreign country, though the foreign country remains independent.
Danish officials rebuffed Trump when he first expressed interest in acquiring the island during his 2017-2021 term, but he never lost interest in the idea, two of the associates and transition advisers said.
In recent weeks Trump has also mused about turning Canada into a U.S. state, an idea that has little basis in reality, experts say.
Yet there is strategic thinking behind Trump's trolling, said Elliott Abrams, a senior fellow at the Council on Foreign Relations.
Justin Trudeau, Canada's embattled prime minister, is unpopular at home and facing mounting calls to resign, Abrams noted. Trump has pledged to slap tariffs on Canadian imports unless it reduces the flow of migrants and drugs into the U.S.
"Trump is piling the pressure on Trudeau, I think it's part of a negotiation over tariffs," Abrams said. "I think you'll see the same thing with Mexico at some point."
McLaughlin, Ramaswamy's adviser, agreed, saying: "It's a message to Trudeau that you and Canada are the little brother, don't bite the hand that feeds you until you have paid your fair share in tariffs," she said.
(This story has been refiled to change to 'unbound,' not 'unbounded,' in paragraph 1)