Trump Withdraws 'Hormuz Toll' After One Day Amid Backlash from Middle Eastern States

Trump Insists on “Replacement With U.S. Investments”

Actual Implementation Remains Unclear

Shipping Industry Also Cites “Violation of International Law”

U.S. President Donald Trump has withdrawn his plan to impose a 20% fee on the value of cargo shipped by civilian vessels passing through the Strait of Hormuz just a day after announcing it. After facing opposition from Middle Eastern allies and criticism from the international shipping industry, the U.S. shifted course, opting instead to be compensated through expanded investments in the U.S. by Middle Eastern countries rather than transit fees.

U.S. President Donald Trump EPA Yonhap News

On the 14th (local time), President Trump announced on Truth Social, "As a result of very productive conversations with Middle Eastern leaders, we have decided to replace the U.S. 20% compensation fee with trade and investment agreements that several Gulf countries will sign with the United States."

According to foreign media outlets such as the Wall Street Journal (WSJ), President Trump met with reporters at the White House that day and discussed related matters with Gulf countries, including Saudi Arabia, the United Arab Emirates (UAE), Qatar, Kuwait, and Bahrain.

President Trump explained that these countries "want to resolve it in another way" and proposed to make additional investments in the United States worth several billion dollars. He said, "I don't like the concept of a transit fee. They will make enormous investments in the United States, and I much prefer that arrangement."

However, it remains unclear whether the Gulf countries actually pledged new investments in the United States. The Financial Times (FT) reported that, immediately following President Trump’s announcement, there was no confirmation from the Gulf countries regarding any new investment pledges. Bloomberg also cited a source familiar with the matter in stating that at least one Middle Eastern country had not agreed to increase existing investment commitments in return for the exemption from transit fees.

Strong Backlash from Middle Eastern Allies and International Shipping Industry... Confusion Within the Administration

The previous day, President Trump had abruptly announced that the United States would charge 20% of the value of cargo carried on civilian vessels passing through the Strait of Hormuz to ensure their safe passage under U.S. military protection. The rationale was that since the United States effectively secures the Strait of Hormuz, through which approximately 20% of global oil supplies flow, countries that use it should share the costs.

However, strong backlash erupted immediately from Gulf countries and the shipping industry. According to Bloomberg, the Gulf Cooperation Council (GCC) member states conveyed to the U.S. that no form of transit fee should be imposed on vessels passing through the Strait of Hormuz. A Gulf-region energy official raised concerns that if the U.S. imposed such a fee, other countries like China might take similar measures at other key maritime routes worldwide.

The international shipping industry also criticized the transit fee as violating the principles of international maritime law. Jakob Larsen, Chief Safety & Security Officer of BIMCO, the world's largest international shipping association, pointed out that the 20% fee would "further discourage transit through the Strait of Hormuz."

There were also reports of confusion within the Trump administration regarding the actual implementation of the measure. According to the WSJ, after President Trump announced the 20% fee policy, administration officials were still reviewing response measures and had yet to determine which department would manage the fee collection. Some believed the Treasury Department should be in charge, while others argued that the Department of Energy was more appropriate given that the Strait primarily serves as an oil transport route.

Industry and market observers had already assessed that implementing a 20% fee would be practically difficult. ClearView Energy Partners, a consulting firm based in Washington, D.C., estimated that adding a 20% fee to crude oil priced at $78 per barrel could raise U.S. gasoline prices by about 37 cents per gallon.

In fact, when President Trump made the announcement about the 20% transit fee the day before, international oil prices surged by nearly 10%, the largest single increase since 2020. Bloomberg reported that the surge temporarily eased following President Trump’s withdrawal announcement, but prices rebounded again shortly thereafter.

Iranian Maritime Blockade Remains... Potential for Greater Economic Impact on Iran

U.S. President Donald Trump declared the end of the war on the 14th (local time). White House

However, even as President Trump withdrew the 20% transit fee plan, he reiterated his commitment to strengthening military pressure on Iran as scheduled. On this day, the United States planned to resume the maritime blockade of ships traveling between Iranian ports and coastal areas starting at 4:00 p.m.

When asked whether he regretted lifting the maritime blockade following the signing of the memorandum of understanding (MOU) to end the war with Iran, President Trump replied, "No. I wanted to give them a chance to make a deal." He continued, "They attacked first, which was a big mistake, and we are striking them hard."

Vessel traffic through the Strait of Hormuz has been significantly restricted. According to the FT, at the time of President Trump’s withdrawal announcement, there were only three oil tankers entering the Gulf, and no large vessels were leaving. Furthermore, between the 13th and 14th, there were no large vessels confirmed to have exited the Strait via the Omani coastal route.

Experts have analyzed that the U.S. maritime blockade could have a more immediate impact on Iran’s imports than on its oil exports. According to the WSJ, Miad Maleki, a senior official at the Foundation for Defense of Democracies and former high-ranking U.S. Treasury Department official, stated, "The shock to imports could be more immediate and cause instability more quickly."

Although Iran has already stockpiled considerable amounts of oil at sea as a precaution against disruptions to its oil exports, experts explained that if the supply of gasoline and other imports needed to meet domestic demand is blocked, economic and political pressures on Iran could escalate rapidly.

This content was produced with the assistance of AI translation services.