U.S. President Donald Trump has announced plans to impose a 20% levy on the value of all cargo transiting the Strait of Hormuz, marking one of the most significant proposed changes to maritime security and international shipping policy in recent years. The announcement coincides with the United States’ decision to reinstate a naval blockade targeting Iranian ports.
In a statement posted on his Truth Social platform, Trump asserted that the Strait of Hormuz would remain open to international navigation regardless of Iran’s actions. However, he declared that Iranian vessels, as well as ships conducting trade with Iran, would be prevented from entering or leaving Iranian ports under the renewed blockade.
At the same time, he announced that every vessel passing through the strategic waterway would be required to pay a fee equivalent to 20% of the total value of its cargo. According to Trump, the charge is intended to reimburse the United States for the financial costs of maintaining security and ensuring safe navigation in one of the world’s most geopolitically volatile maritime corridors.
Trump further stated that the United States would assume the role of the “Guardian of the Strait of Hormuz,” arguing that Washington has long shouldered the burden of protecting global maritime commerce in the region. He characterized the proposed levy as a fair compensation mechanism rather than a tax, claiming that nations benefiting from secure passage should contribute to the expenses incurred by the United States in safeguarding the waterway. The proposal represents a significant departure from the long-standing principle that freedom of navigation through international straits should not be conditioned upon payment to a single state.
The Strait of Hormuz is one of the world’s most strategically important maritime chokepoints. Connecting the Persian Gulf with the Gulf of Oman and the Arabian Sea, it serves as the primary export route for crude oil, refined petroleum products, and liquefied natural gas from major energy producers including Saudi Arabia, the United Arab Emirates, Kuwait, Iraq, Qatar, and Iran.
Energy analysts estimate that roughly one-fifth to one-quarter of global oil consumption passes through the Strait each day, making it indispensable to international energy markets. Consequently, any disruption to shipping or increase in transit costs through the waterway could have immediate consequences for global oil prices, shipping rates, insurance premiums, and inflation worldwide.
The proposal has drawn immediate criticism from the United Nations’ International Maritime Organization (IMO), which rejected the legal basis for imposing mandatory transit charges on vessels merely exercising their right to pass through an international strait. An IMO spokesperson stated that international law does not recognize unilateral fees for the use of straits designated for international navigation.
Under the transit passage regime established by the United Nations Convention on the Law of the Sea (UNCLOS), ships and aircraft enjoy the right to move continuously and expeditiously through international straits without being subjected to arbitrary charges, except for fees directly associated with specific services such as pilotage or port facilities. Although the United States has not ratified UNCLOS, successive U.S. administrations have generally recognized many of its navigational provisions as reflecting customary international law.
Maritime experts have also questioned the proposal’s commercial viability. John McCown, Senior Fellow at the Center for Maritime Strategy and former Chief Executive Officer of Trailer Bridge, argued that a levy amounting to 20% of cargo value would far exceed the economics of modern international shipping. Under normal market conditions, transportation costs paid by cargo owners typically account for only 2% to 3% of the cargo’s value.
A mandatory fee nearly ten times higher than standard freight costs would dramatically increase the cost of international trade, making many shipments economically unviable. Exporters and importers would likely face significantly higher logistics expenses, which would ultimately be passed on to consumers through higher prices for energy, manufactured goods, food, and other commodities.
Beyond its economic implications, the proposal raises important geopolitical and legal questions. Because the Strait of Hormuz is an international waterway bordered primarily by Iran and Oman, no single country possesses the legal authority to unilaterally impose transit fees on all vessels using the passage. Any attempt by the United States to enforce such a policy could face diplomatic opposition from major trading nations, legal challenges under international maritime law, and resistance from shipping companies and insurers. It could also increase tensions in an already fragile region, particularly if enforcement operations result in confrontations involving commercial vessels or naval forces.
If implemented, the proposed levy would extend well beyond its intended impact on Iran. It could reshape global shipping economics, disrupt supply chains, increase transportation and insurance costs, and place additional upward pressure on global inflation. Countries heavily dependent on energy imports from the Persian Gulf including many economies in Asia and Europe would likely experience the greatest economic impact.
As a result, analysts expect the proposal to trigger extensive diplomatic negotiations, legal scrutiny, and strong reactions from governments, international maritime organizations, and the global shipping industry before any such policy could be effectively enforced.
