Trump scraps 20% Hormuz toll 24 hours after proposing it
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- Trump proposed a 20% fee on all Hormuz-transiting vessels — including those of US allies — via Truth Social on Monday, then reversed course within 24 hours, offering 'trade and investment deals' with Gulf allies in exchange for safe passage.
- The US-Iran memorandum of understanding is 'completely dead,' per Defense Priorities' Rosemary Kelanic, after Trump announced the blockade's resumption at 10:16 ET Tuesday alongside new US strikes on targets across Iran.
- Oil prices jumped nearly 10% on Monday — the biggest one-day increase in six years — after Trump's blockade announcement, threatening the recent drop in US consumer prices ahead of November's midterm elections.
- Marco Rubio had condemned Iran's plan to charge Hormuz fees just last month, declaring 'No country is allowed to charge tolls or fees on an international waterway.'
- The June MOU had envisioned Iran arranging 'safe passage of commercial vessels with no charge,' plus billions in promised investment in Iran and an end to international sanctions.
- Trump is weighing strikes on Pickaxe Mountain, a heavily fortified nuclear research site south of Tehran, though the source notes conflicting evidence on whether US airstrikes can damage its tunnels deep beneath granite rock.
- The war is now in its fifth month with no resolution in sight — Kelanic told the BBC 'the most likely ending is a non-ending,' calling it a 'war of attrition' likely to go on for a 'long, long period of time.'
Why it matters: Trump's 24-hour reversal on a toll he pitched as reimbursing US security costs exposes the absence of a viable off-ramp after five months of war, with the MOU's collapse returning the US to the same blockade-vs-escalation dilemma it faced in June. The 10% single-day oil price spike shows how quickly renewed hostilities can reverse the recent drop in consumer prices, putting Republicans in a tenuous economic position heading into the November midterms.
