Panama President Jose Raul Mulino said on Thursday the U.S. was spreading "lies and falsehoods" after the State Department claimed U.S. government vessels would be able to pass through the Panama Canal without paying.

Panama President José Raúl Mulino has rejected 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.

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

Panama President José Raúl Mulino has accused the US of spreading "lies and falsehoods" after the US State Department claimed American government vessels were no longer required to pay a fee to transit through the Panama Canal.

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.