Panama's president denies making a deal that US warships can transit the canal for free

PANAMA CITY (AP) — 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.S. Secretary of Defense Pete Hegseth on Wednesday that he could neither set the fees to transit the canal nor exempt anyone from them and that he was surprised by the U.S. State Department’s statement suggesting otherwise late Wednesday.

“I completely reject that statement yesterday,” Mulino said during his weekly press conference, adding that he had asked Panama’s ambassador in Washington to dispute the State Department’s statement. He was scheduled to speak with U.S. President Donald Trump on Friday.

On Wednesday evening, the U.S. State Department said via X that “U.S. government vessels can now transit the Panama Canal without charge fees, saving the U.S. government millions of dollars a year.”

The Panama Canal Authority put out its own terse statement later Wednesday night saying it had "not made any adjustments” to the fees.

Mulino said the U.S. statement “really surprises me because they’re making an important, institutional statement from the entity that governs United States foreign policy under the president of the United States based on a falsity. And that’s intolerable.”

U.S. Secretary of State Marco Rubio, who met with Mulino and canal administrators and visited the critical trade route earlier this week, said on Thursday from the Dominican Republic that he had no confusion about his discussions with Panama, but “I respect very much the fact that Panama has a process of laws and procedures that they need to follow.”

“The United States has a treaty obligation to protect the Panama Canal if it comes under attack," Rubio said. "That treaty obligation would have to be enforced by the armed forces of the United States, particularly the U.S. Navy. I find it absurd that we would have to pay fees to transit a zone that we are obligated to protect in a time of conflict.”

Rubio had carried a message from Trump that China’s influence at the canal was unacceptable.

Rubio had told Mulino that Trump believed that China’s presence in the canal area may violate a treaty that led the United States to turn the waterway over to Panama in 1999. That treaty calls for the permanent neutrality of the American-built canal.

Canal administrators said they were open to discussing giving U.S. warships priority in crossing the canal, but did not say they had considered waiving fees.

Mulino said via X that he was scheduled to speak to Trump on Friday.

Since 1998, U.S. warships, including submarines, have transited the Panama Canal 994 times. They accounted for just 0.3% of the canal’s traffic during that period. The canal received $25.4 million in total fees for those crossings, according to data from the canal authority.

The fees charged to U.S. warships and those from other nations are based on the ship’s displacement tonnage, or the weight of the water displaced by the vessel. The measure is different than that used to charge commercial vessels.

Mulino said Thursday that both Panama’s constitution and laws regulating the Canal Authority make clear that neither the government nor the authority can waive fees. “It’s a constitutional limitation,” he said.

AP journalist Matthew Lee in Santo Domingo, Dominican Republic, contributed to this report.

Cargo ships wait to transit the Panama Canal in Colon, Panama, Tuesday, Feb. 4, 2025. (AP Photo/Matias Delacroix)

Cargo containers sit stacked as cranes load and unload containers from cargo ships at the Panama Canal's Balboa port, operated by the Panama Ports Company, in Panama City, Friday, Jan. 31, 2025. (AP Photo/Matias Delacroix)

Protesters march against U.S. Secretary of State Marco Rubio's visit in Panama City, Sunday, Feb. 2, 2025. (AP Photo/Matias Delacroix)

U.S. Secretary of State Marco Rubio and Panama Canal Authority Administrator Ricuarte Vásquez, left, tour the Miraflores Locks at the Panama Canal in Panama City, Sunday, Feb. 2, 2025. (AP Photo/Mark Schiefelbein, Pool)

A photo of U.S. Secretary of State Marco Rubio is burned by demonstrators protesting his upcoming visit to Panama City, Friday, Jan. 31, 2025. (AP Photo/Matias Delacroix)

U.S. Secretary of State Marco Rubio, second right, meets with Panamanian President Jose Raul Mulino, left, at the presidential palace in Panama City, Sunday, Feb. 2, 2025. (AP Photo/Mark Schiefelbein, Pool)

Panama's Foreign Minister Javier Martinez-Acha waves to U.S. Secretary of State Marco Rubio as he departs the presidential palace in Panama City after meeting with President Jose Mulino, Sunday, Feb. 2, 2025. (AP Photo/Mark Schiefelbein, Pool)

Demonstrators carry a sign that reads in Spanish: "My country, my sovereignty, my canal," referring to the Panama Canal, as they protest the upcoming visit of U.S. Secretary of State Marco Rubio in Panama City, Friday, Jan. 31, 2025. (AP Photo/Matias Delacroix)

Panama's President Jose Mulino, center, and Foreign Minister Javier Martinez-Acha, let, meet with U.S. Secretary of State Marco Rubio at the presidential palace in Panama City, Sunday, Feb. 2, 2025. (AP Photo/Mark Schiefelbein, Pool)

Secretary of State Marco Rubio, left, Frank Alexis Abrego, Panama's Minister of Public Security, center, and Panama's Foreign Minister Javier Martinez-Acha, watch as people board a repatriation flight bound for Colombia at Albrook Airport in Panama City, Monday, Feb. 3, 2025. (AP Photo/Mark Schiefelbein, Pool)

Cranes load and unload containers from cargo ships at the Cristobal port, operated by the Panama Ports Company, in Colon, Panama, Tuesday, Feb. 4, 2025. (AP Photo/Matias Delacroix)

Cargo containers sit stacked as cranes load and unload containers from cargo ships at the Cristobal port, operated by the Panama Ports Company, in Colon, Tuesday, Panama, Feb. 4, 2025. (AP Photo/Matias Delacroix)

Cargo containers sit stacked as cranes load and unload containers from cargo ships at the Cristobal port, operated by the Panama Ports Company, in Colon, Tuesday, Panama, Feb. 4, 2025. (AP Photo/Matias Delacroix)

DUBAI, United Arab Emirates (AP) — U.S. President Donald Trump said Iran wants to negotiate with Washington after his threat to strike the Islamic Republic over its bloody crackdown on protesters, a move coming as activists said Monday the death toll in the nationwide demonstrations rose to at least 544.

Iran had no immediate reaction to the news, which came after the foreign minister of Oman — long an interlocutor between Washington and Tehran — traveled to Iran this weekend. It also remains unclear just what Iran could promise, particularly as Trump has set strict demands over its nuclear program and its ballistic missile arsenal, which Tehran insists is crucial for its national defense.

Meanwhile Monday, Iran called for pro-government demonstrators to head to the streets in support of the theocracy, a show of force after days of protests directly challenging the rule of 86-year-old Supreme Leader Ayatollah Ali Khamenei. Iranian state television aired chants from the crowd, who shouted “Death to America!” and “Death to Israel!”

Trump and his national security team have been weighing a range of potential responses against Iran including cyberattacks and direct strikes by the U.S. or Israel, according to two people familiar with internal White House discussions who were not authorized to comment publicly and spoke on condition of anonymity.

“The military is looking at it, and we’re looking at some very strong options,” Trump told reporters on Air Force One on Sunday night. Asked about Iran’s threats of retaliation, he said: “If they do that, we will hit them at levels that they’ve never been hit before.”

Trump said that his administration was in talks to set up a meeting with Tehran, but cautioned that he may have to act first as reports of the death toll in Iran mount and the government continues to arrest protesters.

“I think they’re tired of being beat up by the United States,” Trump said. “Iran wants to negotiate.”

He added: “The meeting is being set up, but we may have to act because of what’s happening before the meeting. But a meeting is being set up. Iran called, they want to negotiate.”

Iran through country's parliamentary speaker warned Sunday that the U.S. military and Israel would be “legitimate targets” if America uses force to protect demonstrators.

More than 10,600 people also have been detained over the two weeks of protests, said the U.S.-based Human Rights Activists News Agency, which has been accurate in previous unrest in recent years and gave the death toll. It relies on supporters in Iran crosschecking information. It said 496 of the dead were protesters and 48 were with security forces.

With the internet down in Iran and phone lines cut off, gauging the demonstrations from abroad has grown more difficult. The Associated Press has been unable to independently assess the toll. Iran’s government has not offered overall casualty figures.

Those abroad fear the information blackout is emboldening hard-liners within Iran’s security services to launch a bloody crackdown. Protesters flooded the streets in the country’s capital and its second-largest city on Saturday night into Sunday morning. Online videos purported to show more demonstrations Sunday night into Monday, with a Tehran official acknowledging them in state media.

In Tehran, a witness told the AP that the streets of the capital empty at the sunset call to prayers each night. By the Isha, or nighttime prayer, the streets are deserted.

Part of that stems from the fear of getting caught in the crackdown. Police sent the public a text message that warned: “Given the presence of terrorist groups and armed individuals in some gatherings last night and their plans to cause death, and the firm decision to not tolerate any appeasement and to deal decisively with the rioters, families are strongly advised to take care of their youth and teenagers.”

Another text, which claimed to come from the intelligence arm of the paramilitary Revolutionary Guard, also directly warned people not to take part in demonstrations.

“Dear parents, in view of the enemy’s plan to increase the level of naked violence and the decision to kill people, ... refrain from being on the streets and gathering in places involved in violence, and inform your children about the consequences of cooperating with terrorist mercenaries, which is an example of treason against the country,” the text warned.

The witness spoke to the AP on condition of anonymity due to the ongoing crackdown.

The demonstrations began Dec. 28 over the collapse of the Iranian rial currency, which trades at over 1.4 million to $1, as the country’s economy is squeezed by international sanctions in part levied over its nuclear program. The protests intensified and grew into calls directly challenging Iran’s theocracy.

Nikhinson reported from aboard Air Force One.

In this frame grab from video obtained by the AP outside Iran, a masked demonstrator holds a picture of Iran's Crown Prince Reza Pahlavi during a protest in Tehran, Iran, Friday, January. 9, 2026. (UGC via AP)

In this frame grab from footage circulating on social media from Iran shows protesters taking to the streets despite an intensifying crackdown as the Islamic Republic remains cut off from the rest of the world in Tehran, Iran, Friday, Jan. 9, 2026.(UGC via AP)

In this frame grab from footage circulating on social media from Iran showed protesters once again taking to the streets of Tehran despite an intensifying crackdown as the Islamic Republic remains cut off from the rest of the world in Tehran, Iran, Saturday Jan. 10, 2026. (UGC via AP)