Panama has rejected claims that it agreed to let US government vessels transit the Panama Canal for free. The White House had suggested that Panama made this change, which it said would save the US government millions of dollars annually.

In response, the Panama Canal Authority (ACP) clarified that it is responsible for setting tolls and other fees for transiting the canal. The ACP stated that there have been no changes to these fees.

The Panama Canal is a vital route for global trade, cutting across Panama to connect the Atlantic and Pacific Oceans. US President Donald Trump has often expressed a desire to regain control over the canal, a key trade passage.

US Demands Action on Panama Canal and China
Secretary of State Marco Rubio, currently visiting Latin American countries, called on Panama to make immediate changes regarding China’s influence over the canal. Rubio warned that if Panama did not take action, the US would consider measures to protect its rights under the US-Panama treaty.

During his visit, Rubio met with Panama’s President José Raúl Mulino and Ricaurte Vásquez Morales, the administrator of the Panama Canal. The ACP stated that it would continue to work with the US Navy to ensure priority transit for US vessels. They also reaffirmed their commitment to dialogue with Washington.

Importance of the Panama Canal to the US
The Panama Canal plays a major role in global shipping. In 2024, 52% of canal transits were linked to US ports. Each year, around 14,000 ships use the canal to avoid the long, expensive journey around South America’s southern tip.

In his inaugural speech, President Trump called for the US to “take back” control of the canal, accusing China of operating it and Panama of breaking its neutrality promise. However, President Mulino rejected these claims, stating that the canal is fully controlled by Panama and denying any foreign interference in its operations.

Trump later reiterated his concerns, admitting he was “not happy” with the situation but acknowledging that Panama had made certain commitments. Mulino has stated that Panama will no longer participate in China’s Belt and Road Initiative, a global infrastructure project.

A History of Panama Canal Control
The US constructed the Panama Canal in the early 20th century, but after years of protests, President Jimmy Carter signed a treaty in 1977 to gradually return control to Panama. Trump has referred to this decision as a “big mistake.”