US President Donald Trump has abandoned plans to introduce a 20 percent “safe passage” fee on vessels travelling through the Strait of Hormuz following appeals from several Gulf countries.
Trump had announced the proposed levy on Monday while declaring that the United States was “the guardians of the Hormuz strait”, stating that the charge would help fund security operations around the strategic waterway.
The announcement triggered a sharp rise in global oil prices, prompting leaders from Gulf nations to urgently engage with Trump in an effort to persuade him to reconsider the decision.
The appeals reportedly came from Saudi Arabia, the United Arab Emirates, Bahrain and Qatar, and their efforts led to the reversal of the policy on Tuesday.
“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 Gulf States will be making into the United States,” Trump said in a post on Truth Social.
The US president said the investment agreements would be “MASSIVE but, at the same time, extraordinarily good for them, and their future”.
He added that the deals would result in factories, plants and equipment being brought into the United States at “Historic levels”.
Although Gulf countries have pledged to invest trillions of dollars in the US economy, the exact amount that will be committed over the coming years remains uncertain.
Meanwhile, the United States continues military strikes against Iran amid what appears to be a renewed phase of conflict between both countries, despite ongoing efforts to establish a pathway towards ending the hostilities.