The Panama Canal Authority has dismissed claims by the US State Department that American government vessels would be exempt from transit fees, contradicting earlier statements from Washington.
The dispute comes as former President Donald Trump has reignited calls for US control over the canal, adding to growing diplomatic strains between the two nations.
The disagreement over canal fees has placed the strategic waterway at the centre of geopolitical tensions. The US, which built and controlled the canal for most of the 20th century, formally handed it over to Panama in 1999.
The Trump administration has accused Panama of favouring China, a claim both countries reject, while newly elected Panamanian President José Raúl Mulino has sought to clarify his country’s sovereign control over the canal.
Panama Canal Authority refutes US fee exemption claims
The Panama Canal Authority (ACP), the autonomous body managing the canal, issued a firm response after the US State Department stated that Panama had agreed to waive transit fees for US government vessels. In a statement on Wednesday, the ACP denied any such arrangement and emphasised that it had not altered its existing policies on canal fees or transit rights.
“With total responsibility, the Panama Canal Authority is willing to establish dialogue with relevant US officials regarding the transit of wartime vessels from said country,” the ACP said. The response comes amid increasing scrutiny of canal operations, particularly regarding how it manages transit fees and access for different nations.
The canal is a vital international trade route, handling around 5% of global maritime trade. Fees for transiting the canal vary depending on vessel size and cargo, with costs sometimes reaching hundreds of thousands of dollars per crossing. A fee exemption for US vessels would have represented a significant financial concession, potentially saving the US millions of dollars annually.
Trump’s renewed claims over US control fuel tensions
The dispute over canal fees has been heightened by Trump’s continued claims that the US should reclaim the waterway. Speaking last month, Trump argued that Panama had not adhered to the “moral and legal” principles of the original handover agreement, stating: “If the principles, both moral and legal, of this magnanimous gesture of giving are not followed, then we will demand that the Panama Canal be returned to us, in full, and without question.”
Trump has also suggested that China holds undue influence over the canal, a charge both Panama and China deny. Panama formally recognised China in 2017, leading to increased economic ties, though President Mulino has recently indicated that he will distance the country from China’s Belt and Road Initiative.
While US Secretary of State Marco Rubio recently met with Mulino to discuss regional cooperation, Panama’s government has rejected any suggestion that the canal’s sovereignty is up for negotiation. The 1977 Torrijos-Carter Treaties, which led to the full transfer of the canal to Panama in 1999, remain in force, with Panama maintaining exclusive control over its operations.
The canal remains a critical global shipping route, and disputes over its management could have wider implications for international trade and US-Panama relations.
