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

US Secretary of State Marco Rubio has walked back the assertion of the State Department that Panama “has agreed to no longer charge fees” to US government vessels transiting the Panama Canal after outcry from the Panamanian government.

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."

Panamanian President José Raúl Mulino on Thursday denied 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. Mulino said he had told U.

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

By Elida Moreno PANAMA CITY (Reuters) -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.