In what economists are calling the geopolitical equivalent of flipping the board halfway through Monopoly, the Trump administration has abandoned its 24-hour-old plan to charge a 20 percent toll on cargo passing through the Strait of Hormuz. Turns out, when you have the world’s largest navy, why bother with the boring fee-collection approach?
The new strategy is refreshingly straightforward: just add more ships. Why extract revenue from one of the planet’s most critical shipping lanes when you can instead deploy additional vessels to blockade Iranian ports? It is the kind of thinking that makes sense if you have unlimited military spending and no interest in how markets actually work.
Economists who spent the last day calculating tariff pass-through rates and price elasticity are reportedly updating their résumés. The International Maritime Organization, which had begun drafting strongly worded letters, is now waiting to see if the U.S. Navy will eventually just park a carrier strike group in every harbor.
The real genius move: abandoning a revenue stream that would have annoyed every container ship operator on Earth in favor of a solution that costs billions annually but at least has the virtue of being visually impressive. It is the kind of decision that makes you wonder if there is a different economic textbook out there — one where “more expensive and less efficient” is actually the premium option.
Meanwhile, shipping insurers are updating their premium calculators and hoping this particular chapter in maritime policy gets shorter than the last one.