- President Donald Trump reversed a proposal to impose a fee on cargo traveling through the Strait of Hormuz.
- Trump said the US would no longer seek to impose a 20% fee on such cargo. The proposal had received pushback from shippers.
- Instead, Trump said that after talking to Middle Eastern nations, the US would focus on "trade and investment deals."
President Donald Trump on Tuesday reversed course on his earlier proposal for the US to levy a 20% fee on all cargo flowing through the Strait of Hormuz.
"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 on Tuesday morning.
Trump cited "highly productive conversations with Middle East leadership" as one reason for his reversal.
Brent Crude futures hovered around $84 after the announcement, up just over 1% on the day.
It had been unclear how Trump planned to impose the fee, which he said would reimburse the US for costs incurred in reinstating a blockade on the Strait and ensuring the safe passage of ships through one of the world's most critical trade chokepoints.
Global shipping companies like Hapag-Lloyd had pushed back on Trump's 20% fee proposal. Others pointed out how US officials, like Secretary of State Marco Rubio, had previously said that fees shouldn't be imposed for accessing international waterways.
Iranian Foreign Minister Abbas Araghchi, whose country has considered imposing its own fees, poked fun at Trump's proposal before it was pulled.
"POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service," Araghchi wrote on X, adding, "20% is of course too much. We will be fair."
The US and Iran have resumed attacks after Trump said last week that a peace agreement between the nations was "over."
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