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 Panama Canal Authority on Wednesday denied the U.S. State Department's claim that U.S. government vessels would be able to cross the canal without paying fees, likely ratcheting up tensions after President Donald Trump threatened to take back control of the crossing.

The U.S. State Department on Wednesday announced a new deal with the government of Panama that will eliminate charge fees for U.S. government vessels. "The government of Panama has agreed to no longer charge fees for U.