US President Donald Trump has reversed his plan to impose a 20 percent “safe passage” fee on ships passing through the Strait of Hormuz after intervention from several Gulf countries.
Trump announced the levy on Monday while declaring the US “the guardians of the Strait of Hormuz.”
He said the payment would help cover the cost of maintaining security in the strategic waterway.
The announcement sent oil prices surging, prompting Gulf allies’ leaders to work frantically to get Trump on the phone and persuade him to abandon the proposal.
The appeals came from Saudi Arabia, the United Arab Emirates, Bahrain and Qatar.
Those efforts succeeded as Trump announced a reversal of his plan 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,” he said in a Truth Social post.
Trump said the investments would be “MASSIVE but, at the same time, extraordinarily good for them, and their future”.
He said the deals would see factories, plants and equipment flow into the US at “historic levels”.
The Gulf nations have committed to investing trillions of dollars in the US, though it remains unclear how much they will actually spend over the next several years.
Meanwhile, the US continues to bomb Iran in what appears to be a resumption of active conflict between the two countries, despite an ongoing roadmap aimed at ending the conflict.
