Trump steps back from Hormuz fee plan in favour of Gulf investment deals
By Enas Alashray, Elwely Elwelly, Tala Ramadan and Katharine Jackson
CAIRO/DUBAI/WASHINGTON, July 14 (Reuters) - U.S. President Donald Trump stepped back from a proposal to charge a 20% transit fee to guard the vital Strait of Hormuz waterway as part of the conflict with Iran, saying on Tuesday he would instead seek investment deals with Gulf states.
U.S. forces had carried out waves of attacks for the third night in a row after Tehran said it had closed the strait, prompting Trump on Monday to reinstate a blockade of Iranian shipping and propose the fee.
But just a little under five hours before the fee had been due to come into effect at 2000 GMT, Trump said the strait was open to all shipping traffic except that of Iran.
"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 post on Truth Social.
IRAN REPORTS NEW STRIKES, SIRENS IN KUWAIT
On Monday, Trump told the "Hugh Hewitt Show" that Iran would be hit "very hard tonight, and we're going to hit them hard tomorrow. And there's not a damn thing they can do about it".
The governor's office of Iran's Qeshm Island, on the Strait of Hormuz, said it was hit by a U.S. projectile at around 7 p.m. on Tuesday, Iranian state media reported.
Meanwhile, a U.S. projectile exploded near a water and electricity facility on Iran's Kish Island, the country's semi-official Tasnim news agency said. State media also reported an explosion heard in Andimeshk in southern Khuzestan province.
Iran had earlier hit back by attacking a U.S. Army base in Jordan with ballistic missiles while Bahrain, which hosts a U.S. naval base, said it had fended off an Iranian aerial attack.
Jordan said it had shot down four ballistic missiles and explosions were heard in Manama, Bahrain's capital.
In the early evening, Kuwait said its armed forces were engaging with "hostile" aerial targets, and the state news agency said sirens had sounded in the country.
The worsening attacks had increased doubts that a memorandum of understanding signed last month would lead to a permanent halt in the war, which has disrupted global energy supplies and raised fears of a rise in inflation globally.
SHIPPERS HAD OPPOSED HORMUZ FEES PLAN
The move to impose U.S. fees had drawn sharp criticism. The U.N. shipping agency said it opposed any fees for straits used in international navigation and that there was no legal basis for introducing mandatory tolls on strait transits.
Germany's Hapag-Lloyd, the world's fifth-largest container shipping company, said it would be "fundamentally wrong".
Trump said later on Tuesday that he did not like the concept of a fee for using the strait and said countries had called him to say they wanted to invest in the U.S. instead of being charged a fee.
It was not immediately clear what Gulf states had agreed to, if anything. Trump did not mention any commitments by them, saying only in his post: "Investments will be MASSIVE but, at the same time, extraordinarily good for them, and their future."
Oil prices rose about 2% to a one-month high on Tuesday after the U.S. reimposed the naval blockade on Iran and as the renewed attacks between Washington and Tehran heightened concerns over energy flows.
Before the war, about a fifth of global oil and liquefied natural gas traffic passed through the waterway daily. If the U.S. were to have imposed a 20% fee, it could have generated around $240 million a day.
LEBANON-ISRAEL TALKS
Despite the attacks, regional analysts said the hostilities remained within controlled boundaries, for now, with both sides seeking leverage for an eventual peace deal, but that there was still a risk of fighting spinning out of control.
"I doubt the two sides will resume a full war, especially as Trump will suffer — though there is also a distinct possibility that the Iranians will overplay their hand. That is true of Trump too, of course," said Yezid Sayigh, a senior fellow at the Carnegie Middle East Center.
The conflict has proved unpopular in the U.S., where gasoline prices have risen since the start of the war and congressional elections are looming in November. Half of those surveyed in a Reuters poll said they believed the war had not been worth its costs.
The U.S. and Israel struck Iran on February 28, and Iran attacked Israel and Gulf states that host U.S. bases in a war that also reignited conflict between Israel and Hezbollah militants in Lebanon, killed thousands and displaced millions.
Lebanon and Israel resumed talks on Tuesday in Rome, with Beirut seeking progress towards securing an Israeli withdrawal from south Lebanon under a U.S.-brokered deal.
(Additional reporting by Tom Perry in Beirut; Writing by Michael Perry and Timothy Heritage; Editing by Thomas Derpinghaus, Aidan Lewis, Alison Williams and Sharon Singleton)
