Trump drops proposed 20% Hormuz fee in favour of investment deals with Gulf states

US President Donald Trump has withdrawn his plan, announced only a day earlier, to impose a 20 percent fee on cargo transiting the Strait of Hormuz. Instead, he said the United States would pursue direct trade and investment deals with Gulf states. The reversal affects shipping companies, oil producers and governments worldwide, since the Strait of Hormuz is one of the most critical chokepoints for global oil and gas transport, and any disruption there has immediate consequences for energy prices and supply chains.

Trump made the announcement in a post on his Truth Social platform on Tuesday. He said that, based on “highly productive conversations with Middle East leadership,” he had decided to replace the planned 20 percent “United States Reimbursement Fee” with trade and investment deals that various Gulf states would be making into the United States. He did not specify which countries were involved or detail the scope of any commitments, as noted by the Straits Times and other outlets. Trump also stated that the Strait of Hormuz was “open to ALL Ship traffic except for Iran.”

The original fee announcement came just one day earlier, amid a sharp military escalation between the United States and Iran. According to NDTV and the New York Times, the US had carried out air strikes against Iranian targets overnight, while Iran retaliated by firing ballistic missiles at US military bases in Jordan and Bahrain. Daily Sabah reported that the American strikes lasted roughly five hours. In the context of this escalation, Trump had declared that the US would act as “guardian” of the strategic waterway and would seek compensation for protecting cargo passing through it, according to Al-Monitor.

The proposed fee drew significant pushback from the shipping industry almost immediately. CBS News quoted industry sources who said there was “no legal basis” for such a charge, and reported that costs could have reached tens of millions of dollars per ship. The Independent similarly noted analysts’ warnings that a 20 percent surcharge could more than double the cost of transporting oil from the Gulf to Europe, a scenario widely described as unworkable. Al Jazeera published an analysis questioning whether the toll would find any takers at all, framing the plan in terms some described as “piracy.”

Political opposition also emerged quickly. According to Middle East Eye, the British government said it opposed the proposed toll and was pressing the Trump administration for details. A spokesperson for the British prime minister said the government’s priority was stability and a return to a ceasefire between the US and Iran, adding that toll-free navigation needed to be restored to ease the severe economic impact of the standoff.

Market reaction to the initial announcement was swift. The Jakarta Post reported that Asian stocks fell while oil prices hit a one-month high in Asian trading after Trump first said the US would reinstate a blockade of Iranian shipping and impose the 20 percent fee. These market movements may have been among the pressures that contributed to the quick reversal, although Trump himself did not cite this as a reason for the change.

Several international news agencies, including Anadolu, TASS, Yonhap and Sputnik, reported consistent details of the new plan: the 20 percent fee would be replaced with trade and investment agreements involving Gulf states. However, it remains unclear which countries would be involved, what scale such deals might reach, and whether negotiations are already underway or merely being proposed. It is also unclear how the policy shift affects the broader military confrontation between the US and Iran, which remained tense according to reporting at the time.

The rapid withdrawal of the fee within roughly 24 hours of its announcement raises questions about the coordination behind the initial policy. How the promised investment deals will be structured, and whether Gulf states will actually enter into the arrangements Trump described, remains to be seen, and further developments are likely to be reported in the coming days and weeks.