U.S. President Donald Trump has reversed his position on imposing a 20% reimbursement fee on cargo passing through the Strait of Hormuz, announcing that the proposal will instead be replaced by investment and trade agreements with Gulf states, CNN reports.
Trump had announced on Monday that the proposed fee would help cover the cost of U.S. security operations protecting one of the world’s most critical oil shipping routes.
However, in a post on Truth Social on Tuesday, shortly before meeting the Iraqi prime minister at the White House, Trump said he had decided to abandon the proposal.
“Based on very productive discussions with Middle Eastern leaders, I have decided to replace the 20% Reimbursement Fee for the United States with trade and investment agreements that various Gulf states will make in the United States,” Trump wrote.
The move follows concerns raised by members of his own administration over the legality and practicality of charging fees on international waterways.
Last month, U.S. Secretary of State Marco Rubio said international law does not permit any country to impose tolls on international sea lanes.
“It is an international waterway. No country is allowed to impose tariffs or fees on an international waterway. That is existing international law,” Rubio said.
Vice President JD Vance also stated that the administration’s position was that international waterways should remain free of transit charges.
Trump himself had previously expressed the same view, saying in May that the United States wanted the Strait of Hormuz to remain “open” and “free”, without tariffs or transit fees.
The Strait of Hormuz remains one of the world’s most strategically important maritime corridors, serving as a key route for global oil exports.
