Trump scraps 20% Strait of Hormuz fee, opts for Gulf investment deals

President Donald Trump has scrapped his proposed 20% fee on commercial shipping through the Strait of Hormuz, instead saying Gulf states will make massive investment deals with the US. The reversal comes as US-Iran military conflict escalates and a US naval blockade on Iranian ports is set to resume.

Background and reversal

Trump initially announced the 20% "reimbursement fee" on Monday to cover US costs of protecting the strait Source: BBC. But on Tuesday, he posted on Truth Social that after "highly productive conversations with Middle East leadership," he would replace the fee with "Trade and Investment Deals" Source: Fox Business. Speaking in the Oval Office, Trump said he didn't "like the concept of a fee," but noted it was unfair for the US to protect the strait without compensation Source: Al Jazeera. Gulf leaders reportedly said they would invest "at record amounts" Source: Fox Business.

Military context

The fee reversal occurs amid ongoing US strikes on Iran and Iranian attacks on US assets. Iran has claimed control over the strait and targeted US facilities in Bahrain and Jordan Source: BBC. The US is also reimposing a naval blockade on Iranian ports from Tuesday Source: Al Jazeera. Meanwhile, shipping traffic through the strait has slowed to a two-month low Source: BBC.

Reactions

Israeli Prime Minister Benjamin Netanyahu warned Iran that retaliation would be "much more powerful" if attacked first . Iran's state media reported explosions in multiple cities, including Bushehr .