The United States announced Wednesday that its government vessels will now transit the Panama Canal without charge, after intense pressure from President Donald Trump.
"US government vessels can now transit the Panama Canal without charge fees, saving the US government millions of dollars a year," the state department posted on social media platform X.
The move marks the first public confirmation of concessions hinted at by US secretary of state Marco Rubio, who revealed that Panama made the offer during their discussions on Sunday.
Rubio argued that it was unfair for the US to pay transit fees while also serving as a key defender of the strategic waterway.
Since his election victory in November, Trump has refused to rule out military action to secure the canal, through which 40% of US container traffic flows.
He and Rubio have also raised alarms over Chinese investments in the region, claiming Beijing could potentially block US access in a crisis.
Panama, however, has repeatedly denied Trump's accusations that China has any operational control over the canal.
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