US President Donald Trump stepped back from a proposal to charge a 20 per cent 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.
US 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 a US naval blockade of all Iranian ports and Iranian coastal areas 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.
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."
The move to impose US fees had drawn sharp criticism.
The UN 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.
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