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.

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

The Panama Canal Authority on Wednesday denied the U.S. State Department's claim that U.S. government vessels would be able to cross the canal without paying fees, likely ratcheting up tensions after President Donald Trump threatened to take back control of the crossing.