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It will require approval by the Panamanian government.

But it has now become a "temporary custody" centre housing 299 undocumented migrants deported from the US, the Panamanian government said on Tuesday.

Many Panamanians question Trump’s motives on the canal, suggesting they may have to do with business pursuits or imperialistic expansionism, which has also seen Trump express interest in Greenland, Canada and even the Gaza Strip.

The waterway is in fact owned and operated by the Panamanian government, under a neutrality treaty signed with the US decades ago.

For many Panamanians, the canal represents income, employment and identity.