PANAMA CITY - Panamanian President Jose Raul Mulino on Thursday rejected the US State Department's claim that US government vessels can now transit the Panama Canal free of charge.

At a press conference, Mulino said the US statement, made by "the entity that governs the foreign policy of the United States," is "based on a falsehood and that is intolerable."

The president expressed his "absolute refusal" to "manage bilateral relations based on lies and falsehoods," adding that he had asked Panama's ambassador in Washington to dispute the statement.

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On Wednesday, the US Department of State said on the social platform X that Panama had agreed to waive fees for US government vessels transiting the Panama Canal, which would save the US government "millions of dollars a year."

Mulino also gave details of his conversation with US Secretary of Defense Pete Hegseth on Wednesday, in which he explained that he has no authority to set the canal transit fees or exempt anyone from them.

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The Panama Canal Authority on late Wednesday denied that it would allow US government vessels to transit the canal for free, clarifying that no changes have been made to tolls or fees.