Trump dismisses threat of 20% tariff on Hormuz assets as US prepares to resume blockade of Iranian ports
President Donald Trump has withdrawn his threat of 20% tariffs on all cargo ships in the Strait of Hormuz, as the US fights to break Iran’s hold on the waters.
He said the tariff would be replaced by trade and investment agreements with Gulf states, hours before the US resumed the blockade of Iranian ports.
It follows renewed strikes between the US and Iran, which have caused a sharp rise in oil prices as tanker traffic in the Straits has come to a near standstill.
The United States earlier said it had launched a third night strike to destroy Iran’s ability to strike ships in the region, and on Tuesday Iranian state media reported explosions in several cities, including Bushehr – home to a nuclear power plant.
Tehran said it was targeting US military bases in Bahrain and Jordan after it rammed two United Arab Emirates ships.
The ongoing strikes have underscored the strategic importance of the Strait. Iran accuses the US of interfering in its administration of Hormuz – but controlling it means Tehran could also threaten the global economy.
Trump on Monday announced that the US is now the “custodian” of the Strait of Hormuz, and vowed to impose a 20% tariff on all goods shipped through the waterway to pay for its protection.
Exacerbating these figures, Trump said the US would reimpose its military embargo on Iran, in an effort to further suppress the country’s struggling economy.
US Central Command (Centcom) on Monday said the blockade of US warships in Iranian ports will begin at 16:00 Eastern Time (20:00 GMT/21:00 BST) on Tuesday.
But in his latest post on Truth Social, Trump wrote: “I have decided to replace the 20% Reimbursement of the United States with Trade and Investment deals that the various Gulf countries will make to the United States.”
“Those funds will be HUGE but, at the same time, very good for them, and for their future.” The American president did not provide further details.
He also said that the Strait is “open to ALL traffic except Iran” and that “oil is flowing like never before, thanks to the incredible power of the United States Military”.
Speaking later after talks in Washington with the new Iraqi Prime Minister Ali al-Zaidi, Mr Trump said: “I don’t like the idea of money, but at the same time, it’s not right that we are protecting this Strait for the whole world.”
He said he has changed his initial billing plan after receiving several calls from Gulf leaders.
Meanwhile, shipping data shows that Strait traffic fell to a two-month low. The price of Brent Crude oil has also increased significantly.
Iran effectively blocked the waterway – through which 25% of the world’s oil and 20% of the world’s liquefied natural gas previously passed – after the US and Israel launched strikes against Iran on 28 February.
In another incident on Tuesday, Israeli Prime Minister Benjamin Netanyahu warned that his country’s retaliation against Iran would be “very strong” if it struck first.
“I will say to the leaders of Iran: Don’t rely on things that will be quiet if you attack us,” he said in a video published on social media.
