The US State Department announced a new contract with the government of Panama on Wednesday, eliminating billing fees for US government vessels.
“The Panama government has agreed that US government vessels will no longer charge fees to pass through the Panama Canal,” the State Department wrote in X-Post Wednesday night.
The new contract will save the US government millions of dollars a year, officials noted.
Secretary of State Marco Rubio, right, after being welcomed by Panama Foreign Minister Javier Martinez Chaca, arrived at the Presidential Palace in Panama City on Sunday, February 2nd, Panama was Rubio’s first overseas trip, the secretary state of. (AP/Mark Schiefelbein)
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Panama President Jose Raul Murino promised to close a critical development contract with China on Sunday after meeting with Secretary of State Marco Rubio.
During his visit, former Florida Senator Rubio wrote in a post by X that “the United States cannot and will not continue to carry on effective and growing control over the Panama Canal region.”
President Donald Trump has openly criticised the six-figure premiums charged on travelling US ships, suggesting he would buy back the canal.
Two cargo ships will be placed in the lock at Miraflores on the Panama Canal in Panama City on January 22nd (Martin Bernetti/AFP via Getty Images)
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It was built by the United States for decades, but was later handed over to Panama during the Carter administration.
A newly introduced bill, called the Panama Canal Repurchase Act, gives Trump and Rubio the authority to negotiate with Panama to buy back the canal.
File – President Jimmy Carter speaks next to his wife Rosalyn, who arrives in Panama City to sign the Panama Canal Treaty on June 16, 1978. (AP photo)
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According to the State Department, more than 70% of all ships passing through the canal are inbound or outbound to US ports. It is also a transport point for the US Coast Guard and the Department of Defense.
The ship will need to travel 8,000 miles around South America to avoid using the route.
Top Shot -Secretary of State Marco Rubio is on a flying plane on February 3, 2025 at Panama Pacific International Airport in Panama City. Rubio will be in Panama on his two-day official visit. (Mark Schiefelbein/Pool AP/AFP via Getty Images)
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Fox News Digital requested comment from the State Department but did not receive an immediate response as of Wednesday night.
Danielle Wallace and Stepheny Price of Fox News Digital contributed to this report.
Alexandra Koch is a news writer of Fox News Digital. Before joining Fox News, Alexandra covered news, crimes, religions, and army in the southeast.
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