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Panama rejected the U.S. claim of free passage for government vessels through the Panama Canal.
President Jose Raul Mulino called the U.S. assertion "intolerable" and rejected relations based on falsehoods.
U.S. President Donald Trump had previously hinted at using force to seize the canal, which was built by the U.S. and later handed over to Panama
The Panama Canal is crucial for U.S. trade, with 40% of U.S. container traffic passing through it.
The U.S. claim suggested this decision would save millions of dollars annually for the U.S. government.
The Panama Canal Authority denied making any changes to its tariffs.
Panama canal
It is an artificial waterway that connects the Atlantic Ocean with the Pacific Ocean.
The canal cuts across the Isthmus of Panama and is a conduit for maritime trade.
It was cut through one of the narrowest saddles of the isthmus that joins North and South America.
It is one of the two most strategic artificial waterways in the world, the other being the Suez Canal.
It is approximately 80 kilometers long.
It consists of a series of locks that raise and lower the water level to facilitate the passage of ships through the continental divide.
History:
France began work on the canal in 1881, but financial troubles and diseases made the initiative fail.
The United States took over the project in 1904, and opened the canal on August 15, 1914, and then managed the waterway until 1999.
On December 31, 1999, Panama took over full operation, administration, and maintenance of the Canal, in compliance with the Torrijos-Carter Treaties negotiated with the United States in 1977.
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