Trump Withdraws 20% Fee on Strait of Hormuz Cargo Amid Renewed US-Iran Tensions
President Donald Trump has rescinded his earlier threat to impose a 20% fee on all cargo shipping through the Strait of Hormuz, as the United States intensifies efforts to challenge Iran's control over the strategic waterway.
Trump announced that instead of the toll, the US would pursue "massive" trade and investment agreements with Gulf states. This announcement came just hours before the US reinstated its naval blockade of Iranian ports.
The move follows a series of renewed military strikes between the US and Iran, which have caused a significant increase in oil prices and led to a near halt in tanker traffic through the Strait.
US Military Actions and Iranian Responses
According to US Central Command (Centcom), late Tuesday its forces initiated another round of strikes targeting Iranian capabilities used to attack commercial shipping in the Strait of Hormuz.
Centcom had previously reported conducting a third consecutive night of attacks with the same objective. Concurrently, Iranian state media reported explosions in multiple cities, including Bushehr, which hosts a nuclear power plant.
Tehran claimed to have targeted US military installations in Bahrain and Jordan following earlier attacks on two tankers belonging to the United Arab Emirates.
The ongoing military exchanges highlight the strategic significance of the Strait of Hormuz. Iran accuses the US of interfering in the management of the strait, while control over it enables Tehran to exert pressure on the global economy.
Trump's Initial Fee Proposal and Subsequent Reversal
On Monday, Trump declared the US as the "" of the Strait of Hormuz and threatened to impose a 20% charge on all cargo passing through the waterway to cover protection costs.
He further escalated tensions by announcing the reimposition of a naval blockade on Iran aimed at intensifying economic pressure on the country.
However, in a post on his social media platform Truth Social, Trump stated:
"I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States. Those Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future."
The president did not provide additional details about these trade and investment deals.
He also emphasized that the strait "is open to ALL Ship traffic except for Iran" and claimed that "oil is flowing like never before, thanks to the awesome Power of the United States Military."
Following discussions in Washington with Iraq's new Prime Minister Ali al-Zaidi, Trump commented:
"I don't like the concept of a fee, but at the same time, it's not fair that we're protecting this Strait for the entire world."
He noted that his decision to abandon the fee followed numerous calls from Gulf leaders.
Iran's Position and Impact on Regional Stability
In response to Trump's announcement, Iran asserted it would maintain control over the Strait of Hormuz.
Iran's Deputy Foreign Minister Kazem Gharibabadi stated that Trump's decision to reinstate the blockade "has, in a way, dismantled" a previously agreed truce deal, according to the AFP news agency.
The US initially imposed a naval blockade on all Iranian ports in April to exert pressure on Tehran. Approximately five weeks later, the US military reported redirecting 100 commercial vessels and disabling four under the blockade.
The blockade was lifted in June as part of a memorandum of understanding between the two countries intended to end the conflict. However, disputes over control of the Strait of Hormuz have remained a major point of contention.
Shipping and Oil Market Effects
Shipping data indicates that traffic through the Strait of Hormuz has slowed to a two-month low. Concurrently, the benchmark Brent Crude oil price has surged sharply.
Iran effectively shut down the waterway—through which approximately 25% of the world's oil and 20% of global liquefied natural gas previously passed—after the US and Israel launched strikes against Iran on 28 February.
Israel's Warning to Iran
In a related development on Tuesday, Israeli Prime Minister Benjamin Netanyahu warned that Israel's retaliation against Iran would be "much more powerful" if Israel is attacked first.
"I will say it to the leaders of Iran: Do not count on things remaining quiet if you attack us," he stated in a video published on his social media accounts.
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