San Francisco Frontiers - US claims free passage through Panama Canal

"US government vessels can now transit the Panama Canal without charge fees, saving the US government millions of dollars a year," the State Department said in a post on social media platform X.

It was the first public announcement of promises hinted at by US Secretary of State Marco Rubio, who said that Panama offered concessions during his talks on Sunday.

The Panama Canal Authority, the agency that runs the vital link between the Atlantic and Pacific oceans, said no agreement had been reached.

"The Panama Canal Authority, which is empowered to set tolls and other fees for transiting the canal, reports that it has not made any adjustments to them," the agency said in a statement.

It said it was still ready to hold a dialogue with US authorities.

Rubio said he had told Panama that it was unfair for the United States to be in a position to defend the vital waterway and also to be charged for its use.

US government vessels -- which would be primarily from the navy -- make up a small portion of the ships that go through the canal.

Aircraft carriers are too large to sail through the canal and must make the far longer journey around South America through the Strait of Magellan.

- Pressure from Trump -

The United States and Panama are scheduled to hold new talks on Friday to discuss the canal.

Since winning the US election in November, Trump has refused to rule out the use of force to seize the canal, through which 40 percent of US container traffic passes.

Trump and Rubio have complained about Chinese investment -- including ports on both sides of the canal -- and warned that Beijing could close the waterway to the United States in a crisis.

Panama has forcefully denied Trump's repeated allegations that China has been given a role in operating the canal.

But it has also moved to address US concerns. President Jose Raul Mulino after his talks with Rubio said that Panama would not renew membership in the Belt and Road Initiative, Beijing's signature infrastructure-building program.

Rubio told reporters on Monday that his talks with Mulino were "respectful" and that the visit was "going to achieve potentially good things that assuage concerns we have."

Trump, however, said that he was still "not happy," although he acknowledged that Panama had "agreed to certain things."

Trump in his inaugural address said the United States would be "taking back" the canal -- built more than a century ago by Washington with Afro-Caribbean labor and handed back to Panama at the end of 1999.

Mulino has also ordered an audit of Panama Ports Company, a subsidiary of Hong Kong-based conglomerate CK Hutchison Holdings, which runs the two major ports around the canal.

The company was granted a concession in 1997 that was extended for 25 years in 2021, despite rising concern in Washington as China has tightened its grip on Hong Kong, a former British colony that had been promised autonomy.

P.Thomas--SFF