Panama’s leader rejects State Department claim of deal for U.S. warships to traverse Panama Canal for free

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Panama’s leader rejects State Department claim of deal for U.S. warships to traverse Panama Canal for free

Panama City — Panamanian President José Raúl Mulino on Thursday denied the U.S. State Department’s claim that his country had reached a deal to allow U.S. warships to transit the Panama Canal for free.

Mulino said he had told U.S. Secretary of Defense Pete Hegseth on Wednesday that he could neither set the fees to transit the canal nor exempt anyone from them and that he was surprised by the U.S. State Department’s statement suggesting otherwise late Wednesday.

“I completely reject that statement yesterday,” Mulino said during his weekly press conference, adding that he had asked Panama’s ambassador in Washington to dispute the State Department’s statement.

On Wednesday evening, the U.S. State Department

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: “U.S. government vessels can now transit the Panama Canal without charge fees, saving the U.S. government millions of dollars a year.” The department had no immediate comment Thursday on Mulino’s remarks.

Panama’s President Jose Raul Mulino (C) and U.S. Secretary of State Marco Rubio arrive for a meeting at the presidential palace in Panama City, Feb. 2, 2025.

MARK SCHIEFELBEIN/POOL/AFP/Getty

The Panama Canal Authority put out its own terse statement later Wednesday night saying it had “not made any adjustments” to the fees, adding that it was “willing to establish a dialogue with the pertinent officials from the United States in regards to the transit of U.S. Navy ships.”

Mulino said the U.S. statement “really surprises me because they’re making an important, institutional statement from the entity that governs United States foreign policy under the president of the United States based on a falsity. And that’s intolerable.”

The differing versions came just days after U.S. Secretary of State Marco Rubio met with Mulino and canal administrators and visited the critical trade route. He had carried a message from President Trump that China’s influence at the canal was unacceptable, as the Trump administration makes a push for U.S. control of the canal, which it says it needs for America’s economic security.

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The Panama Canal serves as a shortcut between the Pacific Ocean and the Atlantic Ocean. And although the U.S. led the construction of the major waterway that around 40% of the world’s cargo ship traffic now moves through, its control was given to Panama in 1999.

In their meeting, Rubio told the Panamanian leader that Mr. Trump had determined that China’s influence on the canal constituted “a threat to the canal and represents a violation of the Treaty Concerning the Permanent Neutrality and Operation of the Panama Canal,” a spokesperson said in a statement.

Mulino has refuted those claims, and he said Thursday that both Panama’s constitution and laws regulating the Canal Authority make clear that neither the government nor the authority can waive fees.

“It’s a constitutional limitation,” he said.

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