Secretary of State Marco Rubio on Thursday said it was "absurd" that U.S. government ships are charged to use the Panama Canal after Panama denied a claim that it had agreed to allow them free traversal.

Panama denied a claim made by the State Department on Wednesday that the Central American nation had agreed to no longer charge fees for US government ships to transit the country’s famous canal.

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.

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."

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.

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

The Panama Canal Authority late Wednesday said it has made no change to its tolls or other fees, denying the Trump administration claim that it has agreed to no longer charge U.S. government vessels for using it.

The U.S. Department of State said on Wednesday American government vessels can now transit the Panama Canal without charge fees.

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.