U.S. President Donald Trump has withdrawn his proposal to impose a 20% tariff for what he described as "protecting the Strait of Hormuz," opting instead to seek investment agreements in a significant shift in stance following days of military escalation with Iran.
On Monday, Trump had announced his intention to impose tariffs on vessels crossing the strait, following Iran's announcement of closing the Strait of Hormuz and escalating military confrontation, with U.S. forces launching strikes on Iranian targets and Washington tightening maritime restrictions on Iran.
However, on Tuesday, just less than five hours before the tariffs were set to take effect, Trump declared that the Strait of Hormuz would remain open to maritime traffic, except for Iranian vessels. He indicated that the U.S. administration prefers to focus on understandings and investments rather than imposing tariffs.
Trump's statements came as oil prices experienced notable fluctuations. Futures gains retreated after his announcement to withdraw the tariffs, following earlier rises due to concerns over disruptions in one of the world’s most crucial oil transport waterways.
This development comes amid ongoing tensions between Washington and Tehran, with skepticism about the lasting impact of last month’s memorandum of understanding between the two sides on ceasing escalation. Meanwhile, global energy markets continue to closely watch the developments, fearing their effects on supply, oil prices, and global inflation.