JAKARTA - US President Donald Trump has canceled plans to impose a 20% fee/tariff on cargo crossing the Strait of Hormuz. The policy will be replaced with investments from Gulf countries in the United States.
Trump on Monday, July 13, announced that the tariffs were intended to cover the security costs provided by the US on the vital oil traffic route.
"Based on very productive talks with Middle Eastern leaders, I have decided to replace the 20% US Replacement Fee with a trade and investment agreement to be carried out by various Gulf countries in the United States," Trump wrote on the Truth Social platform, shortly before his meeting with the Iraqi Prime Minister at the White House.
Trump administration officials have previously questioned the feasibility and legal aspects of imposing fees on international waterways.
"It is an international waterway. No country is allowed to collect toll or other fees on international waterways. This is the current international legal provision," said Foreign Minister Marco Rubio last month.
Vice President JD Vance also reiterated the government's stance that "international waterways should be free of toll costs."
Trump himself had previously also stated that the US wanted the Strait of Hormuz to remain "free."
"We want the strait to be open. We want the strait to be free. We don't want toll fees. The strait is international. It is an international waterway," Trump said in May.
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