Panama President José Raúl Mulino has rejected the U.S. State Department’s claim that his country had reached a deal allowing U.S. warships to transit the Panama Canal for free.

Panama President Jose Raul Mulino said on Thursday the U.S. was spreading "lies and falsehoods" after the State Department claimed U.S. government vessels would be able to pass through the Panama Canal without paying.

The State Department claimed it had struck a deal that would save the U.S. government “millions of dollars a year.”

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."

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.