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 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.

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