United States President Donald Trump has reversed his decision to impose a 20 per cent transit levy on vessels using the Strait of Hormuz, opting instead for expanded trade and investment agreements with Gulf nations as tensions with Iran continue to threaten global energy supplies.
The policy reversal came barely 24 hours after Trump announced that ships passing through the strategic waterway would be required to pay a fee, arguing that the United States deserved compensation for protecting one of the world’s busiest maritime trade routes.
Announcing the change, Trump said discussions with leaders from Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait convinced him to abandon the proposed levy.
According to him, Gulf countries preferred strengthening economic partnerships with Washington through major investments rather than paying direct shipping charges.
The U.S. President explained that the new arrangement would generate greater long-term economic benefits while maintaining strong diplomatic relations with America’s regional allies.
He also maintained that international waterways should remain free from unnecessary transit charges.
Despite abandoning the proposed fee, Trump insisted that Washington would continue enforcing a strict blockade on vessels linked to Iranian ports or carrying Iranian cargo, describing the measure as part of ongoing efforts to increase pressure on Tehran.
The Strait of Hormuz remained one of the world’s most important shipping corridors, serving as the primary route for a significant share of global crude oil and natural gas exports.
The waterway has become a major flashpoint since renewed hostilities between the United States, Israel and Iran disrupted commercial shipping and heightened security concerns across the Gulf.
Trump’s initial proposal had triggered sharp reactions from energy markets, with oil prices rising amid fears that additional costs and military tensions could further disrupt global supplies.
Analysts also questioned the move because Washington had previously criticised Iran for proposing similar charges on ships using the strategic passage.
Iran has repeatedly warned against what it describes as foreign interference in the Strait of Hormuz and has cautioned neighbouring Gulf states against supporting American military operations.
The latest exchange of threats has intensified concerns over regional stability and the security of international shipping.
The latest policy shift is the latest in a series of reversals by Trump on trade and economic measures, with observers noting that market reactions and diplomatic engagements have frequently influenced adjustments to his administration’s policies.
