Dubai: US President Donald Trump has reversed his decision to impose a 20% toll on cargo transiting through the Strait of Hormuz, saying that West Asian countries will instead enter into trade and investment agreements with the United States.
“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 with the United States,” Trump said in a post on social media.
The president said the investments “will be MASSIVE,” though it remains unclear whether these would be new commitments beyond those he announced following his visit to the West Asia last year.
On Monday, Trump said that the United States is “reinstating” a blockade on Iran in the Strait of Hormuz and, in a seeming policy reversal, will charge other ships for safe passage. Iran has insisted it controls the critical waterway, as another exchange of fire threatened a return to all-out war.
The US had until now said the strait should remain open to all without tolls, as it was before the US and Israel attacked Iran on February 28. Any attempt by the US or Iran to charge fees would violate global norms on freedom of navigation and raise tensions, likely causing further economic disruption far beyond the region.
Exchanges of fire in recent days, sparked by Iranian attacks on ships, had already cast further doubt on the interim peace deal reached last month. Washington had lifted a blockade it imposed in mid-April as part of that deal, which also called for the strait to be fully reopened.
“We are reinstating the THE IRANIAN BLOCKADE,” Trump said on social media. “All other countries will have fair and open use of the Strait.”
The president said the US would be “reimbursed” by 20% of the value of cargo to help cover “any and all costs necessary to do the job of providing safety and security.”
The US military said it will resume its blockade of Iranian ports on Tuesday at 4 p.m. EDT.
Iran asserts it has the right to manage traffic through the strait and potentially charge fees in accordance with the interim peace deal. The US has disputed that.
Iran on Monday vowed to fight back against any US interference in the Strait. Iran's Foreign Minister Abbas Araghchi mocked Trump on social media and used his support for tolls to legitimise Iran's position.
