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 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.

Panama has vehemently denied claims made by the US on Thursday that its government vessels would have free passage through the Panama Canal, calling the US claims “lies and falsehoods”.