Panama accuses US of “spreading lies” over canal fee exemption

Panama’s President José Raúl Mulino has accused the United States of spreading “lies and falsehoods” after the U.S. State Department claimed that American government vessels were no longer required to pay transit fees through the Panama Canal. The dispute has escalated tensions between the two nations, with Mulino calling the claim “intolerable” and ordering diplomatic action in Washington.

The controversy began after the State Department posted on social media that U.S. government vessels could now transit the Panama Canal without paying fees, resulting in significant cost savings for the U.S. government. Mulino quickly dismissed the claim, asserting that all ships, including those operated by the U.S. government, still pay tolls totaling between $6-7 million annually. He stressed that these fees do not pose an economic burden on the United States and criticized the U.S. handling of bilateral relations.

The U.S. quickly backtracked on its claim, with Secretary of State Marco Rubio acknowledging that American vessels must still pay canal tolls. However, he criticized the fees as “absurd,” citing a long-standing treaty that obligates the U.S. to protect the canal if it comes under attack. Despite this clarification, tensions remain high, with U.S. President Donald Trump maintaining his firm stance on the canal’s strategic importance.

Since taking office, Trump has repeatedly expressed a desire to regain control of the 51-mile (82 km) waterway, which links the Atlantic and Pacific Oceans. He has refused to rule out using force to retake it and is expected to discuss the issue with Mulino in a scheduled call on Friday.

The Panama Canal Authority (ACP) also weighed in on the dispute, stating that it had “not made any adjustment” to its toll system and reaffirming that all vessels must pay fees based on their size and type. The ACP expressed its willingness to engage in dialogue but maintained that the canal remains under Panamanian control.

Amidst the canal fee dispute, Panama announced that it would not renew its participation in China’s Belt and Road Initiative, a global infrastructure-building program. Rubio welcomed the decision, calling it “a great step forward.” However, the Panamanian government denied that the move was made under U.S. pressure.

Trump has long warned that China could leverage its economic influence to block U.S. access to the canal during a crisis, an assertion both Panama and China have strongly denied. On Wednesday, Chinese Foreign Affairs spokesman Lin Jian defended Beijing’s partnership with Panama, highlighting “fruitful results” from their collaboration and urging the Central American nation to “resist external interferences.”

During a meeting with Mulino and Panama Canal Administrator Ricaurte Vásquez Morales, Rubio pushed for “immediate changes” to what he described as China’s growing influence over the waterway. His concerns echoed Trump’s previous statements, in which he claimed the canal was being controlled by China and needed to be “taken back.” Mulino dismissed the allegations, firmly asserting that the canal “is and will remain” in Panamanian hands.

Rubio’s comments about the canal came during the final leg of his Central American tour, where he focused on issues such as migration and drug trafficking. His statement responding to Mulino’s accusation of U.S. misinformation was delivered in the Dominican Republic, marking the conclusion of his diplomatic visit.