A day after proposing a tax on ships transiting the Strait of Hormuz, President Trump said Tuesday that the United States would instead guarantee safe passage to ships from Persian Gulf states that agree to invest in the United States.
It’s unclear how Mr. Trump’s plans will play out, and the president’s latest comments have left some unanswered questions.
But the about-face shows how far the debate over the strait, the Middle East’s vital waterway, has strayed from long-standing practices in the shipping industry and underscores the level of unpredictability facing companies working in the region as the conflict between the United States and Iran escalates into war.
“The fact that things are changing all the time means that it is difficult to make the decision to normalize trade,” said Lasse Kristoffersen, managing director of Wallenius Wilhelmsen, an automotive transport and logistics company based in Norway.
Jakob Larsen, head of safety and security at BIMCO, the world’s largest shipping association, said Mr. Trump’s plan increases the risk that other countries will try to monetize the international waterway they border.
“This is, of course, really very problematic from the shipowner’s point of view and for shipping in general,” Mr Larsen said. “This will only increase the cost of transportation across the world, which will ultimately affect the end customer and create inflationary pressure.” Ultimately, when leaders make comments that undermine international conventions, they weaken, he said.
The shifting plans and sometimes conflicting approaches show how Mr. Trump has struggled to confront Iran, which has repeatedly demonstrated its ability to resist attacks and exert its own control over the strait, using drones and missiles to strike ships. The result was a long-running conflict that shook the global economy and sent oil prices skyrocketing.
On Tuesday, a day after announcing he would charge ships a 20% fee in exchange for U.S. military protection when using the waterway, Mr. Trump said he would drop his fee proposals if Gulf countries invested in the United States.
“Based on very productive conversations with Middle East leaders, I have decided to replace the 20% US reimbursement fee with trade and investment agreements that individual Gulf states will conclude with the United States,” he said on social media. “These investments will be MASSIVE but, at the same time, extraordinarily good for them and their future.”
Mr. Trump’s message did not specify which countries he was referring to or whether countries outside the Persian Gulf that use the strait, including allies like Japan and South Korea, would also be invited to invest in the United States.
His remarks came weeks after his administration, in response to Iran’s threat to impose tolls across the strait, said such levies were unacceptable.
The International Maritime Organization, a United Nations agency that regulates global shipping, said Tuesday it was aware of Mr. Trump’s announcement about seeking trade and investment deals in exchange for safe passage through the strait and was awaiting more details.
“We have always been consistent in our position on fees – IMO strongly opposes the imposition of fees for passage through straits used for international shipping,” Natasha Brown, an agency spokesperson, said in a statement on Tuesday. “There is no legal basis for introducing mandatory tolls simply for transiting a strait. »
Shipping is the cheapest way to transport goods, and more than 80 percent of global trade is transported by ship. Although neither the United States nor Iran has ratified the United Nations Convention on the Law of the Sea, the treaty that provides for freedom of maritime transportation on international waterways, they have generally has followed its standards for decades.
Before the war, the Strait of Hormuz was an international shipping route that ships used free of charge. But since the start of the war, Iranian officials have repeatedly declared their intention to monetize the strait.
Iran immediately took advantage of Mr. Trump’s comments to confirm that governments that provide security for ships have the right to charge. “POTUS is absolutely right. Anyone who provides safe and secure passage of commercial ships through the Strait of Hormuz should be paid for this service,” Iranian Foreign Minister Abbas Araghchi said on social media on Monday. “20% is of course too much. We will be fair.”
Iran fired on three ships sailing in the strait overnight. Two sailors were killed and 14 were injured, four of them seriously, according to the International Maritime Organization.
Traffic across the strait slowed to a near-stop on Monday, as Iran and the United States exchanged strikes for a third straight day, and the fragile truce between the countries appeared to unravel. Just 10 ships passed through the strait on Monday, the lowest level in a month – a fraction of the more than 130 ships per day that passed through the strait before the war, according to Kpler, a maritime data company.
Iran is unlikely to back down in the face of US pressure, according to geopolitical risk consultancy Eurasia Group. The company predicted that Iran would continue to attack the ships to pressure Oman and other Gulf states into agreeing to give Iran permanent influence in the strait.
Mr Kristoffersen said any limitation on freedom of navigation would contravene rules that have governed international shipping for decades.
“Any violation of this principle could obviously encourage others to attempt to do the same,” he said. “And that’s why we place such importance on this principle.” Mr. Kristoffersen, whose company had a ship stranded in the Persian Gulf that came out in early July, said he would not send ships to the Gulf until there was no longer a risk of the ships being attacked. “If the intention is still there, military protection is not enough for us.”
Peter Eavis contributed reporting from New York.
