Trump scraps his Hormuz shipping charge idea but presses ahead with an Iran blockade

Trump Replaces Proposed Hormuz Shipping Fees With Gulf Investment Deals, Maintains Iran Blockade

President Donald Trump announced Tuesday that the United States will abandon a plan to impose a 20% cargo fee on ships transiting the Strait of Hormuz. The reversal comes just one day after the president proposed the United States Reimbursement Fee to cover security costs for acting as the guardian of the volatile waterway.

Instead of tolls, the president stated that the U.S. Will secure Trade and Investment Deals from Gulf states. Speaking in the Oval Office and via Truth Social, Trump said he changed his mind after receiving calls from kings and emirs who expressed a desire to invest billions and billions of dollars and record amounts into the United States. He noted that he does not believe anyone should charge a fee for the strait, but argued it was unfair for the U.S. To provide security for the rest of the world without compensation.

Despite scrapping the fees, Trump is pressing ahead with a naval blockade of Iranian ports. The U.S. Military's Central Command (CENTCOM) stated it would resume the blockade of ships entering or exiting Iranian ports at 4 p.m. ET on Tuesday. Trump described this as THE IRANIAN BLOCKADE, asserting it only stops ships associated with Iranian cargo or ports. He declared the strait open to all other traffic, adding that the U.S. Will be known as THE GUARDIAN OF THE HORMUZ STRAIT.

Escalation and Military Strikes

The policy shifts occur as a 60-day ceasefire agreed upon in June — consisting of a 14-point memorandum of understanding — has largely collapsed. The truce reached a halfway mark this week, but fighting intensified over the weekend after Iran attacked a commercial vessel on Saturday.

The U.S. Launched a wave of strikes on Iran late Monday and early Tuesday. CENTCOM reported targeting Iranian defense systems, missile and drone sites, and maritime capabilities, including the ports of Bandar Abbas and Bushehr, to degrade Iran's ability to attack commercial shipping. Trump claimed the U.S. Has taken away almost all of their military capability

Iran responded with strikes across the region. According to Iranian state media, the Revolutionary Guard targeted two non-compliant supertankers, the MT Mombasa and MT Al Bahiyah, in the Strait of Hormuz. The United Arab Emirates' Defense Ministry reported these ships were hit by cruise missiles in Omani waters, killing one crew member and wounding eight others; Indian officials stated the deceased and six of the wounded were Indian nationals. Iran also launched missiles and drones at U.S. Military outposts in Jordan and infrastructure in Bahrain, where sirens sounded repeatedly. Jordanian air defenses intercepted four Iranian missiles early Tuesday.

Economic and Legal Friction

The Strait of Hormuz is a critical energy artery, typically carrying 20% of the world's energy supplies. The ongoing conflict has severely disrupted trade; Kpler data shows only 22 ships crossed the strait on July 9, compared to 147 crossings the day before the war began on Feb. 28.

The proposed 20% fee drew sharp criticism from the shipping industry and allies. German shipping firm Hapag-Lloyd called the idea fundamentally wrong, noting that unlike the Suez or Panama canals, the strait does not involve major infrastructure investments that justify tolls.

United Nations rights chief Volker Turk condemned the renewed hostilities, warning that disruptions to food and medicine flow would have severe socioeconomic and humanitarian consequences far beyond the region.

Diplomatic Deadlock

The core of the conflict remains a dispute over the legal status of the waterway. While Washington views the strait as an international waterway, Tehran asserts sovereign control and requires ships to seek permission and follow approved routes. Michael Singh of the Washington Institute for Near East Policy noted that the memorandum of understanding used ambiguous language, stating Iran would use its best efforts for safe passage, which Iran interprets as a grant of control.

Other regional tensions persist:

• Lebanon: Israeli Prime Minister Benjamin Netanyahu warned Iran that Israel would deliver a decisive blow if attacked. Israel continues to fight Hezbollah in southern Lebanon, refusing to withdraw troops until the group is disarmed.
• Mediations: Iranian Foreign Minister Abbas Araghchi said Iran remains in touch with mediators in Oman, Qatar, and Pakistan to de-escalate.
• Internal Iran: Following the death of Supreme Leader Ayatollah Ali Khamenei in U.S.-Israeli strikes, current leader Mojtaba Khamenei vowed to avenge his father.

While the U.S. Has advised mariners to use a southern route hugging the coast of Oman, Iran claims this violates the interim agreement. The U.S. Military has instructed mariners in the Gulf of Oman and the strait to coordinate passage via bridge-to-bridge channel 16.