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Donald Trump has said he will drop his demand for a 20 per cent fee on cargo passing through the Strait of Hormuz, as the US and Iran fight for control of the critical waterway.
The US president said on his Truth Social platform on Tuesday that instead of a fee, which he had expected Gulf allies to pay, the countries would instead invest in the US.
“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.
The U-turn came hours ahead of the scheduled reimposition of the US military blockade against ships transiting Iranian ports and coastal areas. The US was also expected to launch another round of strikes on Iran on Tuesday night.
Trump had on Monday demanded the 20 per cent fee from allies including Saudi Arabia, the United Arab Emirates, Qatar, Bahrain and Kuwait, saying the US was entitled to levy the charge for serving as the “guardian” of the strait.
In the Oval Office on Tuesday, he said that he reversed course on the charge following calls from Gulf leaders: “They said: ‘We’d love to do it a different way. We’d love to invest in the United States with billions and billions of dollars.’”
There was no immediate confirmation of any investment pledges from Gulf states. Trump did not provide further details of which countries he had spoken to.
Hostilities between the US and Iran have escalated over the past week as the two move ever closer to a return to full-blown war. The Pentagon has launched six rounds of strikes against Iran, hitting hundreds of targets, with Trump promising a seventh on Tuesday night.
He said that he did not regret lifting the naval blockade, which is due to be reimposed at 4pm Eastern time. “I gave them a chance. I wanted to give them a chance at making a deal,” he said.
“They shot first. And that was a big mistake that they shot first because we have been knocking the hell out of them,” he added.
In the past week, Iran has attacked commercial ships attempting to transit the strait and launched retaliatory strikes against US targets throughout the Gulf.
According to UK Maritime Trade Operations, three tankers were attacked overnight on Monday, resulting in the death of one seafarer.
US Central Command, which oversees American military operations in the Middle East, has said its strikes are intended to “degrade” Iran’s ability to “attack innocent civilians and commercial shipping in the Strait of Hormuz”.
Trump’s U-turn on the proposed fee came as shipping companies condemned it as “fundamentally wrong” and against international maritime law.
Jakob Larsen, chief safety and security officer at the biggest shipowners’ association BIMCO, said that the charge would have constituted “a further disincentive to transiting the strait”, adding that this could only have been offset by “a significant reduction in the threat from Iran”.
Container shipping line Hapag-Lloyd said: “It would be fundamentally wrong to charge tolls for passage through international waters.”
Shipping through the strait has remained depressed since Washington and Tehran broke their ceasefire deal with a series of retaliatory strikes last week. At the time of Trump’s announcement, three tankers were sailing into the Gulf, including one sanctioned ship, but none were sailing out.
No large vessels with their GPS signal turned on have exited the waterway using the route near the Oman coast on Monday or Tuesday.
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