A diplomatic clash unfolds between Panama and the United States over canal toll exemptions for U.S. government vessels.
According to The Washington Post, Panamanian President José Raúl Mulino strongly refuted the U.S. State Department's announcement, claiming Panama had agreed to eliminate transit fees for U.S. government ships using the Panama Canal.
The controversy erupted after the State Department posted on X that Panama would no longer charge fees for U.S. government vessels, a claim that the Panamanian president and the autonomous Panama Canal Authority immediately contested. This development marks a significant setback in U.S.-Panama diplomatic relations, particularly following Secretary of State Marco Rubio's recent visit to the Central American nation.
The diplomatic tension intensified when former President Donald Trump, now back in office, expressed his desire to reclaim the strategically important waterway.
His administration's approach to Panama has been marked by aggressive negotiating tactics aimed at securing lower fees for U.S. vessels and reducing Chinese influence in the region. The United States previously transferred full control of the canal to Panama through a 1977 treaty, which took effect in 1999.
President Mulino addressed the situation during his weekly news conference, expressing his dismay at the State Department's communication. He emphasized that Panama's constitution does not grant him authority to modify canal tolls, stating that the annual U.S. canal fees amount to less than $10 million.
Secretary Rubio, speaking from the Dominican Republic, defended the U.S. position by highlighting America's role in protecting the canal. He acknowledged Panama's legal processes while maintaining that U.S. expectations were clearly communicated during their discussions.
Panama's recent decision to withdraw from China's Belt and Road initiative demonstrated a shift in its international alignments. The Trump administration has been particularly focused on reducing Chinese presence in the region, especially concerning the Hong Kong-based company operating port facilities at both ends of the canal.
The Panamanian government has initiated an audit of these installations while maintaining strong cooperation with the United States on migration enforcement. This collaboration remains a key priority for the Trump administration despite the current disagreement over canal fees.
Eric Jacobstein, who served as a State Department official during the Biden administration, characterized recent regional concessions to Trump as insignificant. He suggested that the potential waiver of canal fees would have minimal financial impact.
The situation highlights the complex nature of U.S.-Panama relations, where historical ties intersect with contemporary political challenges. President Mulino said:
I am very taken aback by yesterday's news release from the State Department. They are making important statements from the entity that controls U.S. foreign affairs based on a falsehood, and that's intolerable.
Despite the controversy over canal tolls, Mulino reported having a productive conversation with U.S. Defense Secretary Pete Hegseth. While affirming Panama's commitment to immigration control cooperation, he remained firm on constitutional limitations regarding canal toll modifications.
The dispute centers on the Trump administration's assertion of receiving toll exemptions for U.S. government vessels using the Panama Canal. President Mulino's firm denial of this claim, supported by the Panama Canal Authority's position, has created diplomatic tension between the two nations. As Panama maintains its constitutional stance on canal toll management while continuing cooperation on migration issues, the path toward resolving this disagreement remains unclear.
