Panama’s President Rejects US Claim of Free Canal Passage for American Ships

Panamanian President José Raúl Mulino (L) and U.S. Secretary of State Marco Rubio arrive for a meeting at the presidential palace in Panama City on Feb. 2, 2025. Mark Schiefelbein/Pool/AFP via Getty Images

The president of Panama on Feb. 6 denied a U.S. State Department claim that it reached an agreement with his country to allow American warships to transit the Panama Canal for free.

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

Mulino also said that he had told U.S. Secretary of Defense Pete Hegseth on Feb. 5 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 on Feb. 5.

Mulino said that the State Department 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.”

On Feb. 5, the State Department wrote on social media platform X that American “government vessels can now transit the Panama Canal without charge fees, saving the U.S. government millions of dollars a year,” stating further in the post that the Panamanian government agreed with the move.

In response, the Panama Canal Authority released its own statement on the night of Feb. 5 stating that it had “made no adjustments” to its fees. But it added that it will “engage in dialogue” with the U.S. government related to military ships.

Earlier this week, Secretary of State Marco Rubio had met with Mulino, telling the Panamanian leader that Chinese Communist Party (CCP) influence over the canal would not be accepted by the Trump administration. Mulino later said he would pull out of the Chinese Belt and Road infrastructure initiative, according to Rubio.

Panama became the first Latin American country to officially endorse China’s Belt and Road Initiative in November 2017 after it changed diplomatic ties from Taiwan to China.

“Yesterday’s announcement by President [Mulino] that Panama will allow its participation in the CCP’s Belt and Road Initiative to expire is a great step forward for U.S.-Panama relations, a free Panama Canal, and another example of [Trump administration] leadership to protect our national security and deliver prosperity for the American people,” Rubio wrote on X after departing the country.

Rubio had told Mulino that Trump believed that China’s presence in the canal area may violate the treaty that led the United States to turn the waterway over to Panama in 1999. That treaty calls for the permanent neutrality of the American-built canal.

Mulino said on Feb. 6 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.

Last month, Trump had signaled that the United States could reassert control over the Panama Canal, saying that such a move could be necessary because of Chinese influence over the waterway.

“We didn’t give it to China. We gave it to Panama, and we’re taking it back,” Trump said on Jan. 20 after he was inaugurated as president, adding that the U.S. government had “foolishly” given the canal to Panama.

The United States largely built the canal and governed the territory around it for decades before the Carter administration signed a series of accords with the Panamanian government in 1977 to give the waterway to Panama in 1999.

“We have been treated very badly from this foolish gift that should have never been made, and Panama’s promise to us has been broken. The purpose of our deal and the spirit of our treaty has been totally violated,” Trump said.

The Associated Press contributed to this report.