Trump Reverses Course on Hormuz Transit Fee After Talks with Gulf Leaders

US President Donald Trump has withdrawn his proposal to impose a 20 percent transit fee on ships using the Strait of Hormuz, opting instead to pursue trade and investment agreements with Gulf allies.

The decision came less than 24 hours after Trump unveiled the levy, saying conversations with regional leaders convinced him to adopt a different strategy.

Announcing the change on Truth Social, Trump said the proposed reimbursement fee would be replaced by economic partnerships with Gulf countries.

“Based on highly productive conversations with Middle East leadership, 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,” he said.

While abandoning the shipping levy, Trump confirmed that Washington would continue implementing a “FULL Blockade” on vessels linked to Iranian ports or carrying Iranian cargo, beginning at 2000 GMT on Tuesday.

The Strait of Hormuz has remained at the centre of regional tensions since Iran largely shut the waterway following US and Israeli strikes on February 28. Although a ceasefire reached in June briefly eased disruptions, renewed hostilities have once again placed the strategic route under pressure.

Trump had earlier declared the United States “THE GUARDIAN OF THE HORMUZ STRAIT” and proposed charging ships to compensate Washington for securing the route. The announcement sent oil prices higher and unsettled allies, many of whom noted Washington’s previous criticism of Iran over similar plans.

Addressing reporters in the Oval Office during a meeting with Iraq’s new prime minister, Trump said leaders from Saudi Arabia, the UAE, Qatar, Bahrain and Kuwait urged him to reconsider.

“I put it out yesterday, I thought it was good. I was called by different people, different countries — kings, emirs, and all of the people that we all know and we all love,” he said.

“They said we’d love to do it a different way. We’d love to invest in the United States, with billions and billions of dollars…. And I like that, actually, because I don’t think anybody should be able to charge a fee for the Strait.”

Trump nevertheless argued that the United States should be compensated for protecting the waterway, saying:

“It was unfair that we’re not in somehow compensated.”

Iran’s military command responded by insisting it would not allow the United States to interfere in the Strait of Hormuz and cautioned Gulf neighbours against collaborating with Washington.

The reversal is the latest in a series of trade policy U-turns by Trump, whose previous tariff adjustments have fuelled market uncertainty and inspired the Wall Street phrase “TACO” — “Trump Always Chickens Out.”

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