Trump scraps 20% Hormuz toll plan, pivots to Gulf investment deals after Iran mocks US fee

Announcement and quick reversal

On Monday 13 July, Donald Trump said the US would "take control" of the Strait of Hormuz and impose a "reimbursement" equal to 20% of the cargo value on all ships transiting the waterway. The move came as US forces conducted a third consecutive night of strikes against Iran and prepared to reestablish a naval blockade of Iranian ports. The fee was pitched as payment for American protection of the strategic chokepoint.

We are going to be paid for protecting it. A significant sum; we simply want to be reimbursed for all of this, for putting our troops in danger.

By Tuesday morning, Trump posted on Truth Social that he was scrapping the 20% levy. Instead, he said, "massive but extraordinarily beneficial" trade and investment agreements with Gulf states would replace the fee.

I have decided to replace the 20% reimbursement fee owed to the United States with trade and investment deals that the various Gulf states will conclude with the United States.

The reversal came hours before a 22:00 deadline he had set for US control of the strait.

Iran mocks US toll, conflict escalates

Iran’s foreign minister Abbas Araghchi dismissed the American fee as excessive and accused Washington of hypocrisy. He noted that the US had spent months condemning Iran’s attempts to monetise control of the Hormuz passage.

Twenty percent is obviously too much. We would be fairer.

He also insisted that Iran remained the "guardian of the strait". The verbal sparring played out against a backdrop of live fire: on the night of 13–14 July, Iranian missiles struck two UAE-flagged tankers inside the strait, according to the UAE defence ministry. US Secretary of State Marco Rubio had warned on 25 June that Iranian fees would cause "total chaos".

Legal and economic pushback

The proposed fee would violate the UN Convention on the Law of the Sea, which guarantees unimpeded passage in international straits. Herman Matthijs, an economics professor and US specialist, told Belgian media that the US had no legal basis for a toll in Hormuz, unlike the artificial Panama Canal. "No treaty provides for a toll in the Strait of Hormuz," he said. Meanwhile, oil prices edged up on the initial announcement. Matthijs warned that the US, largely self-sufficient in energy, would be insulated whereas Europe and Asia, far more dependent on Gulf oil, could see a "chain reaction" if tolls or blockades persisted.

China and France could, for example, tomorrow decide to impose a toll from their military bases in Djibouti and thus control access to the Red Sea.

Regional and European reactions

Emirati newspaper Khaleej Times framed the dispute as "competing claims" between the US and Iran’s Revolutionary Guards, reflecting the unease in Gulf monarchies. The Abu Dhabi-based National urged Europe to take the diplomatic lead to rally nations dependent on free Hormuz transit, not just wealthy ones but also those needing fertiliser to avoid famine. So far, Europe has largely supported a Franco-British naval coalition to protect shipping, but with the US now signalling a transactional approach, pressure is mounting for a more assertive European role.