(Bloomberg) — A dispute between President-elect Donald Trump and Panama over one of the world’s most important waterways is taking a toll on the nation’s assets.

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Panamanian bonds fell across the curve on Monday morning, the highest in emerging markets after Trump threatened to reassert US control of the Panama Canal if the nation did not reduce transit fees. President José Raúl Mulino quickly dismissed the threat, but the developing dispute raised traders’ concerns about Panama’s prospects.

Notes due 2036 fell 0.7 cents against the dollar and the cost of insuring against a sovereign default jumped to the highest level since February on a closing basis amid thin trading, according to the prices compiled by Bloomberg.

The waterway, built by the US Army Corps of Engineers more than a century ago, is one of the biggest sources of cash for the government, which is already under pressure after a key copper mine closed suddenly last year. Plus, it’s on the verge of losing its investment-grade credit score after multiple recent downgrades.

“It’s extra attention that Panama doesn’t need right now,” said Nathalie Marshik, managing director of HSBC in New York.

Bonds have been the worst bet among emerging countries this quarter, losing 8.5% in the period, according to a Bloomberg index.

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