President José Raúl Mulino on Thursday denied a claim by the Trump administration that the Central American country had agreed to eliminate tolls for U.S. government ships using the Panama Canal, in an apparent setback to U.

U.S. Secretary of State Marco Rubio has told Panama’s president that the country must reduce Chinese influence over the Panama Canal area or face potential retaliation from the Trump administration.

As Washington threatens and Panama refusing to back down, a struggle to control this key trade, security and immigration chokepoint appears certain. Prepare now!