Trump abandons Strait of Hormuz shipping toll plan amid US-Iran naval tensions

Key Points

President Trump abandoned a proposed 20 per cent shipping toll for the Strait of Hormuz.
The administration will replace the fee with new trade and investment deals from Gulf states.
A U.S. naval blockade on Iranian ports remains in effect as part of broader regional military actions.
The reversal follows widespread criticism regarding the legality and economic impact of the proposed tolls.

Background History

The Strait of Hormuz is a critical maritime chokepoint handling approximately 20 per cent of global oil and natural gas supplies. Since the outbreak of the Iran-US conflict on February 28, 2026, the waterway has been the site of significant military activity, including Iranian closures, US-led naval escorts, and intermittent blockades.

President Donald Trump has reversed his proposal to impose a 20 per cent fee on commercial cargo passing through the Strait of Hormuz, opting instead to pursue trade and investment agreements with Gulf states. The decision, announced on Tuesday, came less than 24 hours after the administration initially floated the toll as a way to recover costs for providing security in the volatile waterway. While the fee plan has been scrapped, the United States is moving forward with a naval blockade targeting Iranian trade, further escalating regional tensions following a breakdown in recent peace efforts.