Secretary of State Marco Rubio on Thursday said it was "absurd" that Panama charges U.S. government ships to use its canal.

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."

The Panama Canal Authority put out its own terse statement saying it had “not made any adjustments” to the fees.

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

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 Jose Raul Mulino said on social media on Thursday that he would speak to his U.S. counterpart Donald Trump at 3:30pm on Friday afternoon, amid an increasingly tense standoff over the Panama Canal.

Panama’s President José Raúl Mulino said he is scheduled to speak with President Trump on Friday amid his efforts to reclaim the nation’s sought after canal. “I was told a few minutes ago by

President Trump says the canal authority is overcharging. Recent increases are attributed in part to drought, maintenance investments and demand.

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.