President Trump announced a proposal for a 20% toll on commercial shipping transiting the Strait of Hormuz, a move that could generate an estimated $176 billion to $194 billion annually. The announcement, made Monday, comes after months of rejecting Iran's proposals for post-war tolls in the crucial waterway.
The proposed revenue could significantly offset federal civilian payroll costs. Brandon Daniels, CEO of supply chain AI company Exiger, stated that the annual volume of international commerce passing through the strait was between $880 billion and $970 billion before the recent conflict. This translates to the potential toll revenue.
However, the mechanism for imposing and collecting such a toll remains unclear. Daniels noted, "I don’t think that there is a real mechanism for us to charge that toll at this moment, and how we would charge that toll is still an open question of both economic policy and international law." The U.S. government has not outlined concrete steps toward implementing the levy.
Trump's announcement represents a departure from his previous stance favoring a toll-free strait after the conflict with Iran concludes. Administration insiders suggest this proposal may serve as a negotiating tactic with the Islamic Republic, which has indicated its desire to impose its own fees. "It’s a negotiation," a source close to Trump told The Post. "It’s real until there’s an alternative arrangement."
The context for this proposal includes ongoing efforts by Trump to broker an end to the Iran war, which began Feb. 28. A cease-fire took effect April 7, followed by a memorandum of understanding signed June 17 that called for a 60-day toll-free reopening of the strait during nuclear talks. Trump recently ordered airstrikes against Iran and declared both the cease-fire and MOU "over."
Tensions have escalated due to disagreements over shipping routes. Iran's military attacked three commercial ships after they reportedly followed a U.S.-preferred route instead of one closer to the Iranian shoreline.
Trump unveiled his toll idea in a statement also announcing the reinstatement of a U.S. blockade on Iranian ports, which he termed "THE IRANIAN BLOCKADE." He stated, "All other countries will have fair and open use of the Strait." He declared, "The U.S.A. will be, from this point forward, known as ‘THE GUARDIAN OF THE HORMUZ STRAIT,’ but as such, and as a matter of FAIRNESS, will be reimbursed, at the rate of 20% on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World. The process and formation will begin immediately."
The White House has not provided details on the implementation timeline or potential exemptions for allied nations. U.S. military Central Command directed inquiries about the toll to a statement focused on the blockade.
The Strait of Hormuz is a vital route for global energy supplies. Exiger's data indicates approximately $600 billion in annual crude oil shipments and between $80 billion and $120 billion in liquefied natural gas (LNG) pass through annually. An additional $200 billion to $250 billion in trade, including fertilizer and polymers, also transits the waterway.
Iranian Foreign Minister Abbas Araghchi responded to Trump's announcement on Twitter, stating, "POTUS is absolutely right. Whoever provides secure and safe passage of commercial vessels through the Strait of Hormuz should be compensated for this service. Iran has always been the GUARDIAN of the Strait and will remain so FOREVER. 20% is of course too much. We will be fair."