Panama denied a claim made by the State Department on Wednesday that the Central American nation had agreed to no longer charge fees for US government ships to transit the country’s famous canal.

US government ships will no longer pay to transit through the Panama Canal, the US Department of State said on Wednesday, following fierce criticism from Washington over the administration of the waterway.

Panama on Thursday hit back at the United States’ claim that it had secured free passage for government vessels through the Panama Canal. Speaking with

Washington had suggested Panama had agreed to no longer charge fees for US government vessels using the waterway.

Panama President Jose Raul Mulino on Thursday accused the United States government of lying a day earlier when the U.S. State Department claimed that U.S. government vessels would be able to cross the country's namesake canal without paying fees.

President José Raúl Mulino on Thursday denied a claim by the Trump administration that this Central American country had agreed to eliminate tolls for U.S. government ships using the Panama Canal, in an apparent setback to U.

Panama President José Raúl Mulino has accused the US of spreading "lies and falsehoods" after the US State Department claimed American government vessels were no longer required to pay a fee to transit through the Panama Canal.

The Panama Canal Authority said in a statement late on Wednesday that it had not made any changes to charges or rights to cross the canal, after the U.S. State Department said that U.S. government vessels could transit the crossing without being subject to such fees.

The Panamanian leader says he was “incredibly surprised” by the statement, as President Trump threatens a U.S. takeover of the strategic waterway.