U.S. President Donald Trump has withdrawn his proposal to impose a 20% transit fee on ships passing through the Strait of Hormuz, opting instead to pursue trade and investment agreements with Persian Gulf states. The proposal was announced after Iran declared the closure of the strategic waterway but was abandoned shortly before a U.S. naval blockade of Iranian ports was set to take effect.
The proposed U.S. transit fee drew widespread criticism. The UN shipping agency said it opposed any charges on straits used for international navigation, arguing that there was no legal basis for imposing mandatory tolls on vessels transiting such waterways.
Trump said the proposed fee would be replaced by "massive" trade and investment deals with Persian Gulf states, just hours before the U.S. resumed its blockade of Iranian ports, according to the BBC.
"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 Persian Gulf states will be making with the United States," Trump said in a post on Truth Social.