Trump drops proposed 20% Strait of Hormuz toll within 24 hours, opts for Gulf trade deals
Iran war updates: US president Donald Trump, on Tuesday (14 July) has withdrawn his 20% toll on cargo going through the Strait of Hormuz proposal
Iran war updates: US president Donald Trump, on Tuesday (14 July) has withdrawn his 20% toll on cargo going through the Strait of Hormuz proposal, mere twenty four hours after declaring it. The US president instead declared that the toll will be replaced by Gulf States investing in the United States. According to a CNN report, President Trump said on Tuesday (14 July) says, “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 had announced on Monday that the fee would cover US-provided security in the critical oil thoroughfare. Quick answers to key questions • 5 QUESTIONS 1 Why did Trump withdraw the proposed 20% toll on cargo through the Strait of Hormuz? ⌵ Trump withdrew the toll proposal within 24 hours after announcing it, opting instead for Gulf States to invest in the U.S., citing productive discussions with Middle Eastern leaders.
2 What was the initial purpose of the proposed 20% toll on cargo in the Strait of Hormuz? ⌵ The proposed toll was intended to cover the costs of U.S. security operations in the Strait of Hormuz, which is a critical oil transportation route. 3 How did the proposal of a toll affect oil markets initially? ⌵ The announcement of the toll proposal caused oil prices to jump and created volatility in the markets, raising concerns over the legality of charging fees in international waters. 4 What legal objections were raised against the proposed 20% fee for the Strait of Hormuz? ⌵ Officials, including Secretary of State Marco Rubio, argued that charging fees in international waters would breach established maritime law, which guarantees free passage. 5 How might Trump's investment plan differ from the previously proposed toll? ⌵ Trump's investment plan focuses on securing commitments from Gulf States rather than imposing a direct fee, possibly avoiding the legality issues associated with tolls on international waterways. The president added that the investment commitments "will be MASSIVE," though it remains unclear whether these represent fresh pledges or a repackaging of agreements struck during his Middle East visit last year.
From "guardian of the strait" to reimbursement fee The reversal marks a rapid turnaround from Monday, when Trump had proposed the fee as compensation for American forces securing the waterway, one of the world's most critical oil corridors. He had cast the United States as the strait's protector, framing the charge as a matter of fairness for the security burden Washington was prepared to shoulder. That announcement had unsettled oil markets and reignited debate over the legality of charging fees within international waters, an issue senior administration figures had themselves raised in preceding weeks. Rubio and Vance had already flagged legal concerns Trump's own officials had previously cast doubt on the feasibility of the toll. Secretary of State Marco Rubio said last month that such a charge would breach established maritime law. "It's an international waterway. No country is allowed to charge tolls or fees on an international waterway. That's existing international law," Rubio had said. Vice President JD Vance had echoed that position, insisting that "international waterways should be free of tolls." Trump himself had struck a similar tone in May, well before the toll was floated.
The BriefWire