US President Donald Trump on Tuesday withdrew his proposal to impose a 20% fee on ships passing through the Strait of Hormuz, saying the idea would be replaced with trade and investment agreements involving Gulf nations.
In a post on Truth Social, Trump said the decision followed “highly productive conversations” with leaders in the Middle East.
“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,” Trump wrote.
The announcement came just a day after he proposed charging commercial vessels a 20% “United States Reimbursement Fee” for transiting the strategically important waterway.
What fee reversal means for global shipping
The withdrawal of the proposed transit fee removes the immediate risk of additional costs for international shipping companies using the Strait of Hormuz. However, the US blockade on Iran-linked vessels could continue to disrupt maritime trade, particularly for ships connected to Iranian ports or cargo.
The Strait remains a key global shipping route, and any escalation in restrictions or military tensions could still have implications for energy markets, freight rates, and international commerce.
The Hormuz is one of the world’s most critical maritime chokepoints, linking the Persian Gulf with the Gulf of Oman and the Arabian Sea. Around one-fifth of global oil and a significant share of liquefied natural gas (LNG) exports pass through the narrow passage every day.
Any disruption to shipping in the strait affects global energy supplies, increases freight costs, and pushes up oil prices worldwide.
Why did Trump withdraw fee proposal?
Trump did not provide detailed reasons for reversing the proposal but said discussions with Gulf leaders resulted in an alternative approach focused on strengthening economic ties.
Instead of collecting a transit fee from commercial vessels, the United States will pursue trade and investment agreements with Gulf countries, which Trump said would benefit the US economy.
The proposal to levy a 20% fee had drawn attention because of concerns that it could increase shipping costs and further strain global trade at a time of heightened tensions in the region.
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