Why Trump Ditched His 20% Strait Of Hormuz Fee Plan But Kept Pressure On Iran

US President Donald Trump has abandoned his proposed 20% reimbursement fee on commercial ships transiting the Strait of Hormuz less than a day after unveiling it.

US President Donald Trump has abruptly abandoned his proposal to impose a 20 per cent reimbursement fee on commercial vessels transiting the Strait of Hormuz, replacing the controversial plan with promises of fresh Gulf investment in the United States. The reversal came just hours before Washington reinstated its naval blockade of Iranian ports and launched another round of military strikes against Iran.

The policy shift followed intensive discussions between the White House and Gulf leaders after Trump’s announcement triggered widespread questions over how such a fee would be implemented. While the shipping toll has been shelved, the broader US strategy of increasing economic and military pressure on Iran remains firmly in place.

Announcing the decision on Truth Social, Trump said he had decided to replace the proposed 20 per cent transit fee with investment commitments from Gulf partners. “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,” Trump wrote.

Speaking later at the White House during a meeting with the Iraqi Prime Minister, Trump said leaders from Saudi Arabia, the United Arab Emirates, Qatar, Kuwait and other regional partners had offered to expand investments in the United States instead of accepting the proposed shipping charges.

“This way, there’s no fee,” Trump said, arguing that Gulf investment would provide greater long-term economic benefits than imposing transit charges on international shipping. The decision also avoided complex legal and operational questions that had emerged immediately after Monday’s announcement. According to reports, administration officials had been scrambling to determine which federal department would administer and collect the proposed reimbursement fee, with discussions involving both the Treasury and Energy Departments.

Although Trump withdrew the fee proposal, he confirmed the United States would proceed with reinstating its naval blockade of Iranian ports, a measure originally imposed in April before being suspended under last month’s ceasefire agreement. The blockade officially resumed at 4 p.m. ET on Tuesday. Ahead of the blockade, US Central Command (CENTCOM) launched another series of strikes targeting Iranian military infrastructure used to threaten commercial shipping passing through the Strait of Hormuz.

CENTCOM said American aircraft, naval vessels and drones struck missile sites, drone facilities, coastal defence systems and Iranian naval capabilities during a seven-hour operation aimed at degrading Tehran’s ability to attack international shipping. Trump indicated military operations would continue unless Iran changed course.

“We’re going to knock out all of their power plants. We’re going to knock out all of their bridges unless they get to the table and negotiate,” he said during an interview with Fox News, adding that he had not ruled out a limited ground campaign if circumstances required.