Trump Scraps Hormuz Cargo Fee, Replaces with Trade Deals as US Blockade of Iran Ports Resumes
President Donald Trump has reversed his earlier threat to impose a 20% fee on all cargo shipped through the Strait of Hormuz, opting instead to pursue trade and investment deals with Gulf states. The change comes just hours before the United States is set to resume a naval blockade of Iranian ports, escalating tensions in the region.
In a post on Truth Social, Trump announced that the proposed fee would be replaced by “Trade and Investment Deals” with Gulf nations, which he described as “MASSIVE” and beneficial for both parties. He did not provide further details on the agreements.
The reversal follows renewed military strikes between the US and Iran, which have led to a sharp rise in oil prices and a significant slowdown in tanker traffic through the Strait of Hormuz. A strategic waterway, the Strait sees approximately 25% of the world's oil and 20% of global liquefied natural gas pass through it.
Iran effectively closed the waterway after the US and Israel launched strikes against Iran on 28 February. In response, the US has conducted three nights of attacks aimed at degrading Iran's ability to target shipping in the area. Iran has reported blasts in multiple cities, including Bushehr, which houses a nuclear power plant, and has claimed attacks on US military facilities in Bahrain and Jordan.
The US Central Command (Centcom) stated that the naval blockade on Iranian ports would take effect from 16:00 Eastern Time on Tuesday. Trump declared the US as the “guardian” of the Strait, asserting that the waterway is open to all ship traffic except vessels from Iran.
Speaking after talks with Iraqi Prime Minister Ali al-Zaidi, Trump said, “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 indicated that calls from Gulf leaders led to the change in plans.
Shipping data indicates that traffic through the Strait has fallen to a two-month low, and the benchmark Brent Crude oil price has risen sharply. Separately, Israeli Prime Minister Benjamin Netanyahu warned that Israel's retaliation against Iran would be “much more powerful” if Israel is attacked first.
