Trump drops Hormuz fee plan
Washington, July 14
President Donald Trump on Tuesday said he had dropped his proposal to recover the cost of securing the Strait of Hormuz through a 20 per cent shipping fee after Gulf allies instead offered to make billions of dollars in additional investments in the United States.
Trump said the decision followed discussions with leaders from several Gulf nations, who argued that increasing investment in the United States would be a better way to support the long-standing American security role in one of the world's busiest energy corridors.
"So when I put that out yesterday, as we've been doing that for many, many years, it was never fair to me that we would be guarding the strait when we basically don't take anything. We don't need the oil at all," Trump told reporters during a meeting with Iraqi Prime Minister Ali al-Zaidi at the White House.
He said the United States had protected maritime traffic through the Strait of Hormuz for decades even though it no longer depended heavily on oil shipped through the waterway.
"It wasn't important for us, but it was important for allies. It was important for people that we get along with very well, including the major Gulf state countries," Trump said.
According to Trump, the proposal prompted immediate calls from Gulf leaders.
"I was called by different people, different countries, kings and emirs... and they said, we'd love to do it a different way. We'd love to invest in the United States with billions and billions of dollars," he said.
Trump said he found the alternative more attractive than imposing a fee on commercial shipping.
"I like that, actually, because I don't think anybody should be able to charge a fee for the strait or for any other strait relationship in terms of other sections of the world," he said.
"But we were doing it as a reimbursement. The Gulf states are going to invest a tremendous amount of money into the United States, and that was very satisfactory to me. I think it's actually much better."
Pressed on whether the proposal had been abandoned completely, Trump replied that it had.
"You have Saudi Arabia, UAE, Qatar, Bahrain and Kuwait... They would love to invest more money in the United States at record amounts and that would be very acceptable."
"This way there's no fee. I don't like the concept of a fee, but at the same time, it's not fair that we're protecting this strait for the entire world, for China and everyone."
"I don't mind protecting it for China. I don't mind protecting it for anybody, but it's unfair that we're not somehow compensated."
Trump said the new arrangement would encourage larger investments while avoiding direct charges on international shipping.
"They're investing, and they're getting a return on their money, and it's good, but they're going to be making massive investments into the United States, and I like that much better," he said.
— IANS
Reader Comments
I find this whole thing fascinating actually. For decades the US has been the de facto guardian of Persian Gulf security and everyone just accepted it. Now suddenly they want 'reimbursement' because they don't need the oil themselves anymore? The sheer audacity... but hey, if the Gulf states are happy to pay for their own security through investments instead of a fee, who are we to complain? 😅
From India's perspective, this is just noise. We import massive amounts of crude through Hormuz every day. Who guards it or how they're compensated doesn't change the fact that any disruption hits our economy hard. What we need is a more diversified energy mix and strategic petroleum reserves. Relying on US-Gulf relationships for stability is like depending on a weather forecast for your next meal—unpredictable at best.
I appreciate Trump's pragmatic approach here—he was going to charge a fee, listened to feedback, and settled on investment instead. That's how negotiations work. But let's be honest: the Gulf states investing billions in the US isn't about 'security cooperation,' it's about keeping their most important patron happy. And they know it. Smart move on both sides really.
The fact that Trump explicitly mentioned China here is telling. The US wants compensation for protecting trade routes that benefit their strategic rivals too. I get it, but from an Indian standpoint, I'm more concerned about what happens when the Gulf states decide they don't want to make those 'massive investments' anymore—will the US Navy just go home? That would be chaos for everyone.
We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.