Panama Leader Denies Trump Claim of Free Canal Passage
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President Jose Raul Mulino denied that his government had granted free passage for American government ships through the Panama Canal in response to U.S. President Donald Trump’s threats to reclaim the waterway, accusing the U.S. of “lies and falsehoods.”
Mulino, who has vowed to keep the canal in Panamanian hands, said Feb. 6 that he was “surprised” by a State Department statement saying that U.S. government ships will transit for free. Panama’s constitution prohibits such toll exemptions, he said at a press conference.
The pushback came days after Secretary of State Marco Rubio visited Panama amid Trump’s vows to take back the canal unless Mulino’s government reduces prices for U.S. vessels and addresses his concerns that China is wielding influence over the waterway. The U.S. built the canal more than a century ago but ceded control to Panama at the end of 1999.
Bloomberg reported earlier this week, citing a U.S. official, that Panama had promised free passage for U.S. warships through the waterway. The Panama Canal Authority had also said late Feb. 2 that it would “optimize transit priority” of U.S. Navy ships through the vital trade passage, a reference to what the parties had discussed.
Press Release from the Panama Canal Authority. pic.twitter.com/2RrWaoWLoS — The Panama Canal (@thepanamacanal) February 6, 2025
But the authority issued a statement late Feb. 5 saying that it “hasn’t made any adjustment to tolls” following Rubio’s visit. It is willing to hold talks with the U.S. government, it said.
Mulino has directed Panama’s ambassadors to “adopt measures to deny” the claims, “with an emphasis on the embassy in Washington,” he said. “Today, Panama raises my absolute rejection to managing bilateral relations on the basis of lies and falsehoods.”
The State Department declined to immediately comment.
Mulino said he spoke by phone Feb. 5 with U.S. Secretary of Defense Pete Hegseth and expressed his willingness to cooperate on security matters like crime and immigration. He said he explained to Hegseth that both the law governing the waterway and Panama’s constitution bar his government or the canal authority from providing exemptions from tolls.
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“I have conducted foreign relations as it should be done, in good faith,” Mulino said. “I am not going to transgress the nation’s constitution.”
Rubio toured the passage on Feb. 2 with canal authority administrator Ricaurte Vasquez. Mulino and Trump are set to speak by phone Feb. 7, the Panamanian president said in a social media post.
Mulino said the U.S. pays the canal around $7 million in tolls each year, and called claims that China is wielding influence over the trade passage “unbelievable.”
“The canal tolls aren’t bankrupting the U.S. economy,” he said. “There are many more interests that unite us than a few tolls at the canal.”
