US government ships will no longer pay to transit through the Panama Canal, the US Department of State said on Wednesday, following fierce criticism from Washington over the administration of the waterway.

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.

Panama on Thursday hit back at the United States’ claim that it had secured free passage for government vessels through the Panama Canal. Speaking with

The U.S. Department of State said on Wednesday American government vessels can now transit the Panama Canal without charge fees.

Panama President Jose Raul Mulino on Thursday accused the United States government of lying a day earlier when the U.S. State Department claimed that U.S. government vessels would be able to cross the country's namesake canal without paying fees.

Washington had suggested Panama had agreed to no longer charge fees for US government vessels using the waterway.

China's foreign ministry said on Wednesday it had lodged complaints with the United States over "irresponsible" remarks regarding the Panama Canal and "attacks" on China's cooperation with Panama over the canal.

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

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.