Panama Says US Claims It Can Use Canal For Free Are False

Panama has denied the State Department's claims that U.S. government vessels will not be charged a fee to sail through the Panama Canal because of pressure from President Donald Trump who has threatened to take back the waterway.

The State Department posted on X that Panama "has agreed to no longer charge fees for U.S. government vessels to transit the Panama Canal."

It said the change will save the government "millions of dollars a year."

But the Panama Canal Authority, an agency overseen by the Panamanian government, said no such fee agreement has been reached.

"With total responsibility, the Panama Canal Authority, as it has indicated, is willing to establish dialogue with relevant US officials regarding the transit of wartime vessels from said country," the authority said in a statement, the South China Morning Post reported.

In the statement, which the authority said was in response to the State Department, it said it was "empowered to set tolls and other fees for transiting the canal," noting that it had "not made any adjustments to them."

Secretary of State Marco Rubio during a visit with President José Raúl Mulino on Sunday said Panama had made some concessions.

Trump said after returning to the White House for his second term that he was mulling taking back the canal that links the Pacific Ocean and the Caribbean.

"Above all, China is operating the Panama Canal, and we didn't give it to China, we gave it to Panama. And we're taking it back," Trump said after his Jan. 20 inauguration.

The U.S., which completed building the canal in 1914, returned the passage to Panama in 1999, due to treaties signed in 1977.

Rubio during his visit urged Panama to reduce China's "influence and control" in the canal.

He told Mulino that China's influence over the canal "is a threat to the canal and represents a violation of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal, according to a readout of the conversation from the State Department.

Rubio emphasized that the "status quo is unacceptable" and failure to make changes "would require the United States to take measures necessary to protect its rights under the Treaty."

Mulino described his discussion with Rubio as "respectful" and "positive" and said he did not "feel like there's a real threat against the treaty and its validity," the Associated Press reported.

The Panamanian leader also said the country would not renew its agreement with China's Belt and Road Initiative when it expires.

Panama joined the initiative that funds infrastructure projects after ending diplomatic recognition of Taiwan and recognizing Beijing.