Former White House chief of staff Mick Mulvaney said on Monday that President-elect Trump's recent provocations about the U.S. possibly retaking control of the Panama Canal are part of a negotiating tactic to get the rates down. Mulvaney added, however, that Trump has leverage in the negotiating process because he makes “credible” threats. “This is a negotiation,” Mulvaney said on NewsNation’s “The Hill” about Trump’s recent Panama remarks, adding, “By the way, one of the reasons Trump is so good at negotiating is that it's a credible threat.” “If he says, you know, ‘Look, we're going to have problems with Panama if they don't lower the rates,’” Mulvaney continued, “You know, I don't envision American troops going in to retake the canal, but you got to think that someone is out there scratching their head going, ‘Is Donald Trump crazy enough to do something like that?’” “And it's that viable threat that sort of gives him negotiating leverage that not a lot of other folks could ever come up with,” Mulvaney said. On Sunday, Trump suggested to a conference of his supporters that the Panama Canal be returned to U.S. control, vowing swift action over the matter after he takes office in less than one month. “It was given to Panama and to the people of Panama, but it has provisions. You got to treat us fairly and they haven’t treated us fairly,” Trump said at Turning Point’s “American Fest.” “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 United States of America in full, quickly and without question,” Trump added. When an audience member yelled, “take it back,” Trump replied, “That’s a good idea.” Trump also accused the Central American country of charging excessive fees for ships that use the canal to cross between the Pacific and Atlantic oceans. Panama charges tariffs for boats and ships to make use of the canal. Fees can vary based on the size and purpose of the vessels, ranging from $0.50 to $300,000. The U.S. handed Panama control of the canal in 1999. “Has anyone ever heard of the Panama Canal?” Trump told the crowd at “America Fest.” “Because we’re being ripped off at the Panama Canal like we’re being ripped off everywhere else.” “The fees being charged by Panama are ridiculous, highly unfair,” Trump said. Mulvaney said he’s curious to see how the dynamic plays out, if Panamanian leaders “call his bluff.” “So it will be, I'll be fascinated to see how that one plays out, because it's going to be sort of difficult to, it's easy for them to call his bluff and simply say, ‘We're not lowering the rates,’” Mulvaney said. “And I don't know what the next move on the chess board is.” The Panamanian president, José Raúl Mulino, fired back at Trump for suggesting the canal return to U.S. control. “As president, I want to express clearly that every square meter of the Panama Canal and its adjacent zone belongs to Panama, and will continue to do so,” Mulino said in video statement, according to an English translation. “The sovereignty and independence of our country are not negotiable.” The Hill is owned by Nexstar Media Group, which also owns NewsNation.