By Michael Crowley
The State Department said Wednesday that Panama had agreed to stop charging fees for U.S. government vessels to traverse the Panama Canal, days after Secretary of State Marco Rubio visited the country and conveyed President Donald Trump’s brewing anger over the waterway’s management.
But hours later, the Panama Canal Authority denied that such a deal had been made, saying in its own statement that it “has not made any adjustments” to its regular fees.
The announcement came in the form of a brief post on social media, which provided no further detail apart from saying that the agreement “will save the United States millions of dollars a year,” although it is unclear whether the savings would even be that significant. The State Department did not immediately respond to a request for comment.
Trump has also long complained that Panama overcharges U.S. military ships to traverse the American-built waterway, even though U.S. naval vessels pay fees according to the same formula as those from other countries.
The Panamanian statement said the canal authority was “fully prepared to engage in dialogue with relevant United States officials regarding the transit of U.S. warships.”
But it is unclear whether an agreement to waive those fees, should it materialize, would placate Trump anyway, given that he has raised larger complaints about the vital shipping route.
Trump has threatened in recent weeks to take dramatic action against Panama, an ally of the United States, including “taking back” the 51-mile shipping route across the country, which cuts the journey from the Atlantic Ocean to the Pacific Ocean by thousands of miles.
In Rubio’s meeting Sunday with Panama’s president, José Raúl Mulino, he conveyed Trump’s demand for “immediate changes” to address what an official U.S. summary of the meeting called China’s “current position of influence and control” over the canal. That notion is disputed by many experts.
Trump and Rubio have cited the operation of two ports on either end of the canal by a Hong Kong-based company as a potential security threat, and a violation of a treaty between the United States and Panama requiring that the canal remain neutral. Mulino says his government is conducting an audit to determine whether action is warranted.
Trump has complained about fees at the canal at least since the beginning of his first term as president. In a June 2017 meeting with Panama’s president at the time, Juan Carlos Varela, Trump said the U.S. Navy was paying too much to traverse the canal — about $1 million annually, according to John Feeley, who served as U.S. ambassador to Panama from 2015 until 2018.
That cost is so minuscule it would be akin to a rounding error in the Pentagon’s budget, analysts say.
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