US-Iran war: Trump drops 20% toll plan on Hormuz, seeks Gulf investment deals instead

US President Donald Trump on Tuesday announced the replacement of the proposed 20% Washington reimbursement fee linked to shipping through the Strait of Hormuz with trade and investment agreements from Gulf countries, saying the move follows "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," he wrote.

Also read: Trump's Strait of Hormuz Plan Explained: Can the US charge ships and what it means for India




The announcement marks a shift from Trump's earlier proposal to levy a fee on ships using the strategically vital waterway after the US military helped keep the Strait of Hormuz open during the recent conflict with Iran. Instead of collecting transit-related charges, Trump said Gulf nations would make "massive" investments into the US, boosting factories, manufacturing and employment while strengthening economic ties with Washington.

"The Gulf States are going to invest a tremendous amount of money into the United States, and that was very satisfactory to me. I think it's actually much better," he told reporters later.

In a post on Truth Social, Trump credited the US military with ensuring uninterrupted oil flows through the Strait of Hormuz, calling it the "awesome Power of the United States Military."

He added the waterway remains open to all commercial shipping except vessels linked to Iran, adding that the US would impose a "full blockade" on ships travelling to or from Iranian ports or carrying Iranian cargo.

Trump praised Defence Secretary Pete Hegseth, Chairman of the Joint Chiefs of Staff Gen. Dan Caine and US Central Command chief Admiral Brad Cooper for their role in securing the maritime route.

Reiterating his stance on Iran, Trump said the country would remain under a blockade covering ships connected to Iranian trade and asserted that "Iran will never have a nuclear weapon." He also accused Tehran's leadership of steering the country toward "total destruction."

Trump's Hormuz toll plan

Earlier on Monday, the US president had said the country was reinstating a naval blockade on Iran and would impose a 20% reimbursement fee on all cargo passing through the Strait of Hormuz, arguing that Washington should be compensated for securing one of the world's most critical shipping lanes.

In a Truth Social post and later in an interview with Fox News, Trump said the US would become the "guardian angel of the strait" after Iran claimed it had closed the waterway. He argued that wealthy nations benefiting from the route should pay the US for maintaining security, though he did not spell out how the reimbursement mechanism would work.

The proposal came amid heightened tensions in the Gulf after Iran announced the closure of the Strait of Hormuz following what it described as an unauthorised transit. Tehran later said shipping would remain suspended until "stability and calm" returned, while the Revolutionary Guards warned that continued US military presence in the waterway could trigger further disruptions to global oil and gas markets.

'No one should be able to charge a fee for Hormuz'

During a bilateral meeting with Iraqi Prime Minister Ali al-Zaidi, Trump claimed that he spoke to the leaders of Saudi Arabia, UAE, Qatar, Bahrain, and Kuwait and others.

"I don't think ​anybody should ⁠be able ‌to ​charge ​a fee," said Trump, ⁠who on Monday had proposed Washington would ​charge a 20% transit fee on the key energy artery.

"I spoke to all of them, and they would love to invest more money in the United States at record amounts, and that would be very acceptable. And this way, there's no fee. I don't like the concept of a fee, but at the same time, it's not fair that we're protecting this Strait for the entire world, for China and everyone. I don't mind protecting it for China. I don't mind protecting it for anybody. But it's unfair that we're not, in some way, compensated..."

In another response about regrets about lifting the naval blockade or giving the sanctions waivers to Iran, the president said that he wanted to give them a chance at making a deal. "...and they shot first, and that was a big mistake that they shot first—because we have been knocking the hell out of them."