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

Navy use of the canal is infrequent, with about 40 vessels transiting annually, excluding the service’s aircraft carriers, which are too large. Allowing free access would reportedly save the U.S. about $13 million each year, according to the WSJ report.

Panamanian President José Raúl Mulino on Thursday denied the U.S. State Department’s claim that his country had agreed to allow U.S. government vessels to transit the Panama Canal for free, an assertion that has upended the two countries’ talks on the waterway.

Panama's president says the State Department's claim of an agreement granting U.S. warships free canal passage was "based on a falsity. And that's intolerable."

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.

The U.S. Department of State recently announced that U.S. Navy ships have been exempted from tolls for passing through the Panama Canal. According to the "Wall Street Journal," the announcement from Washington surprised the authority managing the canal,

Panamanian President José Raúl Mulino on Thursday rejected U.S. claims that American warships and boats can transit the Panama Canal without paying a standard fee. In a weekly news conference,

President Donald Trump says China is running the Panama Canal and “we’re gonna take it back, or something very powerful’s going to happen.” Panama then reportedly made the offer to allow U.S.

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