PANAMA CITY (AP) — Panamanian President José Raúl Mulino on Thursday denied the U.S. State Department’s claim that his country had reached a deal allowing 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 said via X that “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.

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.

Panama's president denies making a deal that US ships can transit the canal for free | iNFOnews.ca — Cargo containers sit stacked as cranes load and unload containers from cargo ships at the Cristobal port, operated by the Panama Ports Company, in Colon, Tuesday, Panama, Feb. 4, 2025. (AP Photo/Matias Delacroix)

Rubio had carried a message from U.S. President Donald Trump that China’s influence at the canal was unacceptable.

Rubio had told Mulino that Trump believed that China’s presence in the canal area may violate a 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.

Canal administrators said they were open to discussing giving U.S. warships priority in crossing the canal, but did not say they had considered waiving fees.