Panama denies State Dept claim that it is eliminating fees for US gov vessels using canal

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Panama responds to meeting with Marco Rubio about the canal

Fox News chief international correspondent Steve Harrigan reports on key takeaways from Secretary of State Marco Rubio's meeting with the Panamanian president on 'The Story.'

Panama has denied the U.S. State Department's claim that the country will eliminate fees for U.S. government vessels transiting the Panama Canal, just one day after the State Department initially announced a deal.

The Panama Canal Authority, which is authorized to set tolls and other fees for vessels that transit the canal, said in a statement on Thursday that it has not made any adjustments to these tolls and fees. The statement added that the Panama Canal Authority "is ready to establish a dialogue" with U.S. officials regarding the transit of U.S. warships.

The State Department on Wednesday announced a new deal with the government of Panama that will eliminate charge fees for U.S. government vessels.

"The government of Panama has agreed to no longer charge fees for U.S. government vessels to transit the Panama Canal," the State Department wrote in an X post Wednesday night.

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U.S. Secretary of State Marco Rubio, right, waves after being welcomed by Panama's Foreign Minister Javier Martinez-Acha, left, upon his arrival at the presidential palace in Panama City, on Sunday, Feb. 2. Panama is Rubio's first trip abroad as Secretary of State. (AP/Mark Schiefelbein)

The new agreement would have saved the U.S. government millions of dollars a year, officials noted.

Panama President José Raúl Mulino promised on Sunday to end a key development deal with China after meeting with Secretary of State Marco Rubio. 

During his visit, former Florida Senator Rubio wrote in a post on X that "the United States cannot, and will not, allow the Chinese Communist Party to continue with its effective and growing control over the Panama Canal area." 

President Donald Trump, who has openly criticized the six-figure premiums imposed on U.S. ships traveling through, has suggested repurchasing the canal.

Two cargo ships enter the Miraflores Locks of the Panama Canal in Panama City on Jan. 22. (Martin Bernetti/AFP via Getty Images)

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It was built over decades by the U.S., but was later handed over to Panama during the Carter administration.

A newly introduced bill called the "Panama Canal Repurchase Act" would give Trump and Rubio the authority to negotiate with Panama to repurchase the canal.

President Jimmy Carter speaks next to his wife Rosalynn upon arrival to Panama City to sign the Panama Canal Treaty on June 16, 1978. (AP Photo)

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More than 70 percent of all vessels traveling through the canal are inbound or outbound to U.S. ports, according to the State Department. It is also a key transit point for U.S. Coast Guard and Department of Defense vessels. 

Ships would need to travel 8,000 additional miles around South America to avoid using the pathway.

Secretary of State Marco Rubio boards a plane en route to El Salvador at Panama Pacifico International Airport in Panama City on Feb. 3, 2025. Rubio is in Panama on a two-day official visit.? (MARK SCHIEFELBEIN/Pool AP/AFP via Getty Images)

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Fox News Digital requested comment from the State Department, but did not immediately receive a response as of Wednesday night.

Fox News Digital's Danielle Wallace and Stepheny Price contributed to this report.