Panama has agreed to eliminate transit fees for U.S. government vessels using the Panama Canal, a move that the U.S. State Department says will save the U.S. government millions of dollars each year. The agreement followed discussions between U.S. Secretary of State Marco Rubio and Panamanian President Jose Raul Mulino.

This decision comes after President Donald Trump had criticized Panama for charging excessive fees and threatened to take control of the canal. Trump had expressed his concerns on his Truth Social platform, stating that the fees charged by Panama were "ridiculous" and that the U.S. Navy and commerce were being treated unfairly. Mulino, however, dismissed Trump's threat to retake control of the canal.

Key points regarding the situation:

The U.S. State Department announced the agreement, highlighting the savings for the U.S. government.

The decision follows a meeting between Secretary of State Marco Rubio and Panama's President Jose Raul Mulino.

President Trump had previously accused Panama of charging excessive fees for using the canal.

The U.S. largely built the canal in 1914 and handed control to Panama in 1999 after a period of joint administration.

Rubio cautioned Panama about China's influence over the canal, stating the U.S. would take "necessary measures" if changes were not made.

A bill called the "Panama Canal Repurchase Act" would give Trump and Rubio the authority to negotiate with Panama to repurchase the canal.

More than 70 percent of vessels traveling through the canal are inbound or outbound to U.S. ports, and it is a key transit point for U.S. Coast Guard and Department of Defence vessels.

This decision occurs amidst previous tensions, including President Donald Trump's accusations of "excessive" charges by Panama. During a meeting with Panamanian leaders, Rubio emphasized the U.S.'s readiness to take "necessary measures" if the situation remained unchanged, reinforcing the commitment to safeguarding U.S. rights under existing treaty agreements.

While the search results mention potential reasons behind the timing of the decision to waive fees, they do not explicitly state the main reasons behind Panama's decision. However, the search results do provide some context clues:

The agreement was publicized in a social media post on X.

The fee exemption aligns with President Donald Trump's critique of "excessive" charges.

Heightened U.S. concerns over China's growing influence in the canal area.

Secretary of State Marco Rubio seemed to amplify security apprehensions with Panama's president during a visit to Panama.

Agencies