Trump drops Hormuz fee plan in favour of Gulf investment deals
The US President said he would replace the proposed 20 per cent fee with trade and investment deals with various Gulf states.
Vessels at the Strait of Hormuz, as seen from Musandam, Oman, Jun 18, 2026. (Photo: REUTERS/Stringer)
WASHINGTON: US President Donald Trump stepped back on Tuesday (Jul 14) from a proposal to charge a 20 per cent transit fee on shipping through the Strait of Hormuz amid the war with Iran, saying he would instead seek investment deals with Gulf states.
US forces carried out attacks for a fourth night in a row after Tehran said it had closed the strait, prompting Trump on Monday to reinstate a blockade of Iranian shipping and propose the fee.
Iran attacked a US Army base in Jordan with ballistic missiles, while Bahrain, which hosts a US naval base, said it had fended off an Iranian aerial attack and other Gulf states also came under fire. The United Arab Emirates said an Indian crew member had been killed and eight others wounded when two Emirati oil tankers were struck by Iranian cruise missiles.
Renewed attacks since last week have increased doubts that a memorandum of understanding signed last month would lead to a permanent halt in the war, which has disrupted global energy supplies and stoked inflation fears globally.
Regional analysts say the hostilities remain within controlled boundaries, for now, with both sides seeking leverage for an eventual peace deal, but warn there is a risk that fighting could spin out of control.
The move to impose US fees had drawn sharp criticism. The UN shipping agency said it opposed any fees for straits used in international navigation and that there was no legal basis for introducing mandatory tolls on strait transits.
A little under five hours before a US naval blockade of all Iranian ports and Iranian coastal areas was due to come into effect at 8pm GMT (Wednesday, 4am, Singapore time), Trump said the strait was open to all shipping traffic except that of Iran.
"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 in a post on Truth Social.
IRAN REPORTS NEW STRIKES, SIRENS IN KUWAIT AND BAHRAIN
On Monday, Trump told the "Hugh Hewitt Show" that Iran would be hit "very hard tonight, and we're going to hit them hard tomorrow. And there's not a damn thing they can do about it."
The governor's office of Iran's Qeshm Island, on the Strait of Hormuz, said it was struck by a US projectile at around 7pm on Tuesday (Wednesday, 3am, Sinapore time), Iranian state media reported.
Meanwhile, a US projectile exploded near a water and electricity facility on Iran's Kish Island, the country's semi-official Tasnim news agency said. State media also reported an explosion in Andimeshk in southern Khuzestan province, but later said it was a controlled explosion and not an attack.
Jordan said it had shot down four ballistic missiles and explosions were heard in Manama, Bahrain's capital.
In the early evening, Kuwait said its armed forces were engaging with "hostile" aerial targets, and the state news agency said sirens had sounded in the country. Bahrain's Interior Ministry also said sirens had been sounded.
Oil prices edged up to a fresh one-month high on Tuesday after the US reimposed the naval blockade on Iran and as renewed attacks between Washington and Tehran heightened concerns over energy flows through the Strait of Hormuz.
Trump said he did not like the concept of a fee for using the strait and said countries had called him to say they wanted to invest in the US instead of being charged a fee.
Before the war, about a fifth of global oil and liquefied natural gas traffic passed through the Strait of Hormuz daily. If the US had imposed a 20 per cent fee, it could have generated around US$240 million a day.
It was not immediately clear what Gulf states had agreed to, if anything. Trump did not mention any commitments, saying only in his post: "Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future."
Yezid Sayigh, a senior fellow at the Carnegie Middle East Center, said he doubted the sides would resume a full-scale war, "especially as Trump will suffer."
However, he added: "There is also a distinct possibility that the Iranians will overplay their hand. That is true of Trump too, of course."
The conflict has proved unpopular in the US, where gasoline prices have risen and congressional elections are looming in November. Half of those surveyed in a Reuters poll said they believed the war had not been worth its costs.
The global economy has largely weathered the energy shock fairly well, but the International Monetary Fund warned last month that an escalation extending the war beyond mid-July posed big risks, especially since countries have largely used up their strategic oil reserves to cushion the impact on consumers.
