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.

The State Department surprised Panama with the announcement that U.S. government ships would pass through the Panama Canal for free. In a Wednesday X post, the State Department announced that U.S. government vessels could now transit the Panama Canal without paying fees,

No formal deal has been agreed to as President Trump threatens an American takeover of the strategic waterway.