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

President Jose Raul Mulino denied that his government had granted free passage for American government ships through the Panama Canal in response to Donald Trump’s threats to reclaim the waterway, accusing the US of “lies and falsehoods.

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, Mulino disputed a statement from the State Department on free transit after Secretary of State Marco Rubio’s visit to Panama earlier this week.

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.

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.