Panama president decries US 'lies' about canal fees

Speaking to journalists, Mulino expressed his "absolute rejection" of managing US-Panama ties "based on lies and falsehoods."

The Panama Canal Authority issued a statement late on Wednesday denying the claim from the US State Department earlier in the day that Panama's government had agreed to no longer charge crossing fees for US government vessels, in a move that would save the US millions of dollars a year.

Trump has accused the Central American country of charging excessive rates to use its trade passage, one of the busiest in the world.

"Why are they making an important institutional statement from the entity that governs the foreign policy of the United States, under the President of the United States, based on a falsehood?" Mulino asked on Thursday, calling the State Department's claim "simply and plainly intolerable".

Mulino said he had asked his ambassador in Washington to take "firm steps" to deny the Trump administration's claim.