July 15, 2026 – 12:08 pm
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Donald Trump’s ridiculous proposal to take control of the Strait of Hormuz and charge a 20 percent fee for the privilege of safely crossing the strait lasted all of 24 hours.
This was always unfortunate: first, the surcharge of 20 percent of the cost of the ship’s cargo was a stupid figure pulled out of nowhere. That would increase the cost of a barrel of oil by about $16 per night, analysts say.
US President Donald Trump in the Oval Office on Tuesday.Bloomberg
Trump now says the US will defend the strait, but Gulf countries that rely heavily on it – Saudi Arabia, Qatar, the United Arab Emirates, Kuwait and Bahrain – will invest more in the US to cover the costs of that defense.
Well, let’s see. However, this thought bubble, which Trump raised several times, dating back to April 6 at a White House press conference, will have a legacy that extends beyond his short life.
This, of course, will not be forgotten by Iran, which has taken the president’s offer as an acknowledgment that it has every right to charge for “maritime services” provided in the strait (read: allowing your ship to cross the border without being fired upon).
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“The president is absolutely right,” Foreign Minister Abbas Araghchi said, perhaps a first for an Iranian statesman. “Whoever ensures the safe passage of commercial ships through the Strait of Hormuz should be compensated for this service.”
If the war has allowed Iran to weaponize the strait in the first place, then the tariff proposal only gives them more ammunition.
But it is also a sign that the White House and the US administration are failing to gain control of an escalating conflict it thought was over.
“I actually take his statement … as evidence of desperation,” Richard Nephew, a nuclear weapons expert and senior fellow at Columbia University’s Center for Global Energy Policy, said ahead of Trump’s imminent retreat.
“He’s grasping at straws. He thought he had a good military strategy, but it didn’t work, so he had to make a deal. He told everyone: not only is this a lot, but these people are completely reasonable – he got regime change.
“He made up this story about him changing the regime to something better. I think what it all comes down to is this: the last week has proven pretty conclusively that everything he’s been saying is wrong.”
Trump was close to admitting he was wrong about Iran’s so-called new leadership. When asked at a recent NATO summit why he stopped calling them rational and smart and started calling them “scum” and “cuckoos,” he replied: “I recognized them.”
But as Nephew points out, Trump will never truly admit his guilt. And this worries him. Despite the US President’s apparent reluctance to return to full-scale bombing, he ordered strikes almost every night for a week and notified Congress of the renewed conflict.
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“If you (Trump) can’t admit any failure, that means you need to stick with your original approach,” Nephew says.
“At the moment he thinks the only option he has is to increase the intensity of violence, and the threat of closing (the strait) is part of that.
“You saw this in the domestic political context of the United States on January 6… His response to this kind of great humiliation is to expand, to double down and to increase the risk.
“It actually really scares me what he might do if he feels like he’s going to lose.”
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Nephew doesn’t expect Trump to use nuclear weapons. “(But) I think you’d be a fool if you didn’t at least open up the possibility that he might decide to expand his choice of targets.”
The rest of Monday’s announcement is that the US has renewed its blockade of Iran. Although this constitutes an act of war, it does not involve the dropping of bombs.
The hope is that the measure will put so much pressure on Iran’s crippled economy that it will force the regime to change course. “It’s possible,” says Nephew.
“But let’s remember what this brings us back to – it takes us back to the Memorandum of Understanding, which still returned functional responsibility and control of the strait to the Islamic Revolutionary Guard Corps.”
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Indeed, the agreement only provided for free navigation in the strait for 60 days. It said Iran and Oman would engage in dialogue on long-term management of the waterway, as well as with the Gulf countries that border it.
“Yes, the Iranians hate the blockade, yes, they would prefer to go back to the Memorandum of Understanding,” says Nephew.
“But the MOU was not good. The results of the MOU may be better than what we have now, but the long-term arc of the MOU is quite dangerous.”
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Michael Koziol is a North America correspondent for The Age and the Sydney Morning Herald. He is a former Sydney editor, deputy editor of the Sun-Herald and a federal political reporter in Canberra.Connect via X or e-mail.