Panama rejects U.S. claim it dropped canal fees after Rubio visit

PANAMA CITY – President José Raúl Mulino on Thursday denied a claim by the Trump administration that the Central American country had agreed to eliminate tolls for U.S. government ships using the Panama Canal, in an apparent setback to U.S. diplomatic efforts.

“I am very taken aback by yesterday’s news release from the State Department,” Mulino said during his weekly news conference. “They are making important statements from the entity that controls U.S. foreign affairs based on a falsehood, and that’s intolerable.”

President Donald Trump’s administration had portrayed Panama as a quick victory in its efforts to more strongly assert U.S. influence in the hemisphere. Just days ago, Secretary of State Marco Rubio visited Panama on his first official trip and pressured its government to reduce Chinese influence in the country. Mulino subsequently said he would not renew an agreement to participate in China’s signature foreign infrastructure program, the Belt and Road initiative.

On Wednesday night, the State Department posted on the social platform X that Panama “has agreed to no longer charge fees for U.S. government vessels to transit the Panama Canal. This saves the U.S. government millions of dollars a year.”

But the Panama Canal Authority – which is independent – responded that it was the only body with the power to set tolls. “It hasn’t made any change to them,” the authority said in a statement, adding that it was “open to establishing a dialogue with U.S. authorities” about the matter.

Mulino told reporters: “Panama communicates to the world my absolute rejection of this method of managing bilateral relations on the basis of lies and falsehoods.”

Trump startled Panama and many Americans by declaring shortly before he took office that he wanted to reclaim the Panama Canal, which he has called a “VITAL National Asset for the United States.” The United States signed a treaty in 1977 that gave Panama full control of the canal by 1999.

Mulino has said that transferring control of the canal back to the United States is “impossible.” Trump’s demands have been widely seen as a negotiating tactic to secure lower fees for U.S. goods passing through the canal, to win closer cooperation on migration and to reduce Chinese influence. Port facilities at both ends of the canal are operated by a Hong Kong-based company.

Panama has cooperated closely with the United States, especially on migration enforcement, a key priority of the Trump administration. On that matter, Rubio thanked Mulino “for his support of a joint repatriation program, which has reduced illegal migration,” according to a summary of their talks.

Mulino spoke by phone Wednesday with U.S. Defense Secretary Pete Hegseth. The Panamanian leader said the call was “very positive.” Mulino said he expressed Panama’s willingness to continue cooperating on immigration control but emphasized that Panama’s constitution does not grant him the power to alter tolls for ships transiting the canal.

He noted that U.S. canal fees were less than $10 million a year. “It’s not like the canal tolls are ruining the United States economy,” he said. “And that’s not how you handle, at least in my little book, the bilateral relationship of two countries that have been friends and partners through history.”