Why Trump's Backtracked Strait of Hormuz Fee Would Have Been a Disaster
Summary
President Donald Trump proposed charging a 20 percent fee on cargo passing through the Strait of Hormuz but reversed the idea the next day. The proposed fee faced criticism because it could violate international maritime law and significantly increase shipping costs.Key Facts
- President Donald Trump suggested a 20 percent fee on cargo passing through the Strait of Hormuz.
- He quickly withdrew the proposal and instead promised large trade and investment deals with Gulf countries.
- Shipping organizations said the fee would disrupt established international maritime rules.
- The Baltic and International Maritime Council estimated fees could cost up to $27 million per trip for large oil tankers.
- Container ships might face fees between $65 million and $260 million per voyage.
- The fees would likely increase consumer prices rather than just affect shipping companies.
- The United Nations Convention on the Law of the Sea (UNCLOS) protects the right of ships to pass through international waterways without fees.
- The U.S., while not officially a UNCLOS member, usually follows its guidelines.
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