Panama Rejects U.S. Claim Of Free Canal Passage, Calls It “Intolerable & False”

Panama has strongly denied U.S. claims that its government had agreed to let American vessels transit the Panama Canal for free, calling the statement “intolerable” and based on falsehoods.

Since U.S. President Donald Trump took over office in his second term, he has repeatedly criticised Panama for charging high fees from the U.S. Navy vessels to use the canal.

He also threatened to take back control of the canal which he describes favours Chinese interests, and warned of “very powerful action” against Chinese influence in Panama. After these statements, tensions between the two countries have escalated.

On Thursday, Panama’s President José Raúl Mulino criticised the U.S. State Department after it claimed on a social media post that American government vessels would now pass through the canal without paying tolls, a move that could save millions of dollars annually.

Mulino rejected the statement, saying he would not tolerate bilateral relations built on misinformation.

U.S. government vessels can now transit the Panama Canal without charge fees, saving the U.S. government millions of dollars a year. pic.twitter.com/G4gV2mHu7O

— Department of State (@StateDept) February 6, 2025

The Panama Canal Authority (ACP), which oversees the vital waterway, also denied any such agreement, clarifying that toll rates remained unchanged for all vessels, including those from the U.S. Navy.

Under a 1977 neutrality treaty, U.S. military ships receive priority passage but are still required to pay transit fees based on size and type.

A subsidiary of a Hong-Kong-based company operates ports along the waterway, which has raised concerns among Americans that China could block U.S. access in a crisis- an allegation both Panama and China have denied.

Meanwhile, U.S. Secretary of State Marco Rubio has also been vocal about the issue. Speaking at a press conference on Thursday, he criticised the current arrangement, stating that it was unreasonable for U.S. naval vessels to pay tolls for a canal that the U.S. is obligated to protect in times of conflict.

However, he later clarified that no official deal had been finalised regarding the free passage of the vessels.

Panama announced its withdrawal from China’s global infrastructure project, the Belt and Road Initiative (BRI). Mulino confirmed that his government had formally notified Beijing of its decision, following a 90-day process required for withdrawal.

However, he maintained that this decision was made in Panama’s national interest and not due to U.S. pressure.

Rubio welcomed Panama’s exit from the BRI, calling it a step forward in US-Panama relations. Despite this, Mulino stated he was still evaluating Panama’s relationship with China to determine what would best serve the country’s economy and interests.

The U.S. leader has previously accused Panama of charging excessive tolls for American ships, while Mulino has insisted that the transit fees- reportedly between $6 million and $7 million annually for U.S. government vessels-are standard and not harming the U.S. economy.

References: Reuters, BBC

Source: Maritime Shipping News