President Donald Trump abandoned a proposed 20 percent [1] fee on cargo transiting the Strait of Hormuz on July 14, 2026 [1].
This shift in policy comes as the U.S. manages escalating tensions with Iran. By replacing a direct toll with trade and investment deals, the administration seeks to secure Gulf cooperation, and financial commitments in exchange for continued maritime protection.
Trump said the decision followed "highly productive conversations with Middle East leadership" [3]. The original plan would have imposed a significant cost on vessels moving through one of the world's most critical oil transit chokepoints.
"I don't think anybody should be able to charge a fee for the strait ... but we were doing it as a reimbursement," Trump said [1]. He said that the previous approach was intended to offset costs associated with securing the waterway.
Instead of the fee, the administration will now focus on bilateral agreements with Gulf states, including Saudi Arabia, and the United Arab Emirates [2]. Trump said, "We will replace it with trade and investment deals from Gulf states instead" [1].
The pivot suggests a strategy of leveraging security guarantees to attract foreign direct investment into the U.S. economy. This approach moves away from a transactional fee system toward a broader economic partnership with regional powers.
Gulf leaders have historically sought stability in the Strait of Hormuz to ensure the flow of energy exports. The removal of the proposed 20 percent [1] fee removes a potential economic friction point between the U.S. and its regional allies during a period of heightened military volatility.
“"We will replace it with trade and investment deals from Gulf states instead."”
The transition from a transit fee to investment deals indicates a shift in U.S. leverage strategies in the Persian Gulf. By trading maritime security for economic investment, the administration is attempting to strengthen geopolitical ties with Gulf monarchies while avoiding a financial burden that could have destabilized global energy prices or alienated key allies during an Iran-U.S. escalation.
