Trump drops 20% Strait of Hormuz toll plan within 24 hours, opts for Gulf trade deals: ‘I have decided to replace…’
President Donald Trump has withdrawn his proposed 20% toll on cargo passing through the Strait of Hormuz, replacing it with trade and investment deals with Gulf states.
Iran war updates: US President Donald Trump, on Tuesday, 14 July, withdrew his 20% toll on cargo going through the Strait of Hormuz proposal, mere 24 hours after declaring it. The US president instead declared that the toll will be replaced by Gulf States investing in the United States.
“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 on Truth Social moments before he was expected to meet Iraq’s prime minister at the White House.
Trump had announced on Monday that the fee would cover US-provided security in the critical oil thoroughfare.
Quick answers to key questions
Trump decided to withdraw the 20% toll proposal within 24 hours after announcing it, favoring Gulf trade deals instead, citing productive conversations with Middle Eastern leaders.
Trump's new plan revolves around Gulf States making significant investments in the United States, replacing the previously proposed 20% toll for security at the Strait of Hormuz.
The initial announcement of the toll spooked oil markets, but the reversal helped ease crude prices, showing that such fees can directly influence market stability.
Shipping companies may opt to pay for security under Trump's new investment-focused plan, as suggested by maritime law experts, given that any fee arrangement would be optional.
Legal concerns stemmed from international law, which prohibits countries from charging tolls on international waterways, a point raised by Trump's own officials, including Secretary of State Marco Rubio.
The president added that the investment commitments "will be MASSIVE", though it remains unclear whether these represent fresh pledges or a repackaging of agreements struck during his Middle East visit last year.
President Trump said he would continue with a "FULL Blockade" on ships coming to and from Iranian ports, or carrying anything that has to do with Iranian cargo.
Trump had declared on Monday that Washington was now the "THE GUARDIAN OF THE HORMUZ STRAIT" and would impose hefty fees on shipping to reimburse the United States for protecting the key conduit for oil and gas.
Iran's military command had insisted it would not allow the United States to "interfere" in the Strait of Hormuz, while also warning its Gulf neighbours, who have borne the brunt of its retaliatory attacks, against cooperating with Washington.
READ DONALD TRUMP's COMPLETE TRUTH SOCIAL POST
Oil is flowing like never before, thanks to the awesome Power of the United States Military. A special salute to Secretary of War, Pete Hegseth, Chairman of the Joint Chiefs of Staff, Dan Caine, and Commander of the United States Central Command, Admiral Brad Cooper. Because of them, and all members of the Most Powerful Military anywhere in the World, BY FAR, the Strait of Hormuz is open to ALL Ship traffic except for Iran — and that is because of their lying, violent, malicious leadership, which is taking them down the path of TOTAL DESTRUCTION. We will therefore have a FULL Blockade, but only on Ships coming to and from Iranian ports, or carrying anything have to do with Iranian cargo. 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. Those Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future. As everyone is aware, we have the largest Dollar Investment into the United States, of any Country in History, but these new Investments will make that Number even larger, and we will see Factories, Plants, and Equipment pour into the United States at Historic levels, which will create additional millions of High Paying AMERICAN Jobs! America is WINNING again, winning like never before. The days of Iran killing hundreds of thousands of people, including 52,000 protestors, are OVER and, most importantly, IRAN WILL NEVER HAVE A NUCLEAR WEAPON! Thank you for your attention to this matter. President DONALD J. TRUMP
From ‘guardian of the strait’ to reimbursement fee
The reversal marks a rapid turnaround from Monday (13 July), when US president Trump had proposed the 20% fee as compensation for American forces securing the Startit of Hormuz, one of the world's most critical oil corridors. Trump had cast the United States as the strait's protector, framing the charge as a matter of fairness for the security burden Washington was prepared to shoulder.
That announcement had unsettled oil markets and reignited debate over the legality of charging fees within international waters, an issue senior administration figures had themselves raised in preceding weeks.
Rubio and Vance had already flagged legal concerns
Trump's own officials had previously cast doubt on the feasibility of the toll. Secretary of State Marco Rubio said last month that such a charge would breach established maritime law.
"It's an international waterway. No country is allowed to charge tolls or fees on an international waterway. That's existing international law," Rubio had said.
Vice President JD Vance had echoed that position, insisting that "international waterways should be free of tolls." Trump himself had struck a similar tone in May, well before the toll was floated.
"We want it open. We want it free. We don't want tolls. It's international. It's an international waterway," Trump had said at the time.
Oil markets react as tensions with Iran persist
The now-abandoned 20% toll proposal had been announced by Donald Trump alongside the reimposition of a US naval blockade against Iranian ships in the Strait of Hormuz, amid a rapidly escalating confrontation between Washington and Tehran. Oil prices had jumped and stocks had fallen following the initial announcement, which came as the US and Iran exchanged fresh strikes.
Following Tuesday's climbdown, crude prices eased back from earlier highs. West Texas Intermediate futures rose 23 cents to 78.37 dollars a barrel, while Brent crude, the international benchmark, gained 65 cents to reach 83.95 dollars.
About the Author
Sayantani Biswas is an assistant editor at Livemint with seven years of experience covering geopolitics, foreign policy, international relations and global power dynamics. She reports on Indian and international politics, including elections worldwide, and specialises in historically grounded analysis of contemporary conflicts and state decisions. She joined Mint in 2021, after covering politics at publications including The Telegraph. <br> She holds an MPhil in Comparative Literature from Jadavpur University (2019), with a specialisation in postcolonial Latin American literature. Her research examined economic nationalism through Eduardo Galeano’s Open Veins of Latin America. She also writes on political language, cultural memory and the long shadows of conflict. <br> Biswas grew up in Durgapur, an industrial town in West Bengal shaped by migration, which drew families from across India to the Durgapur Steel Plant. As the only child in a joint family, she spent years listening—almost obsessively—to her grandparents’ testimonies of struggle, fear and loss as they fled Bangladesh during the Partition of 1947. This formative exposure to lived historical memory later converged with her training in Comparative Literature, equipping her to analyse socio-economic structures and their reverberations. <br> Outside the newsroom, she gravitates towards cultural history and critical theory, returning often to texts such as Paulo Freire’s Pedagogy of the Oppressed. As a journalist, she is committed to accuracy, intellectual rigour and fairness, and believes political reporting demands not only clarity and speed, but historical depth, contextual precision, and a disciplined resistance to spectacle.
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