Donald Trump has announced the US will abandon its proposed 20 per cent fee on cargo passing through the Strait of Hormuz. Instead of the fee, which was intended for Gulf allies to pay, Trump stated that countries would invest in the United States based on "highly productive conversations with Middle East leadership."

This decision comes ahead of the scheduled reimposition of a US military blockade against ships transiting Iranian ports. Hostilities between the US and Iran have escalated recently with tit-for-tat air strikes. The US military began its seventh round of strikes on Iran on Tuesday, according to US Central Command.

Trump had previously demanded the fee, citing the US role as the "guardian" of the strait. However, he reversed course following calls from Gulf leaders, who expressed a preference for investing in the US. Shipping companies had also condemned the proposed fee as "fundamentally wrong" and against international maritime law. Shipping through the strait has remained depressed amid the ongoing conflict.