Trump's Hormuz Toll Failed in 24 Hours — War Has No Funding

On Monday Donald Trump declared the United States the guardian of the Strait of Hormuz and said Washington would be reimbursed 20 percent on every cargo that moved through it. He wrote it in capital letters. By Tuesday it was gone. "Based on highly productive conversations with Middle East leadership," he posted on Truth Social, "I have decided to replace the 20% United States Reimbursement Fee with Trade and Investment Deals that the various Gulf States will be making into the United States." The policy lasted about twenty-four hours.

It is worth being clear about what replaced it, because it is close to nothing. Trump told reporters the investments would come "primarily" from the United Arab Emirates, Saudi Arabia, Qatar, Kuwait and Bahrain, "then others." But those same Gulf states had already committed more than $2 trillion to invest in the United States over the coming years, and they committed it before the war started. The toll was a demand for new money. What Washington accepted instead was a restatement of money it had already been promised. Trump did not trade the toll for a better deal. He dropped it, and called the thing already in his pocket a replacement.

He dropped it because the people who would have paid said no. Gulf governments objected, the UN's maritime agency judged the levy illegal, and the shipping world simply refused to accept that a country which does not border a waterway may bill the world for using it. That is worth sitting with. Last week's argument here was that the toll was what a war looks like when the legislature will not pay for it and the president decides the cargo will — that Trump had found a revenue source requiring no vote. The revenue source is now gone, and the vote is going worse than ever.

On Tuesday, the day the toll died, Senate Democrats blocked the annual defence policy bill on a procedural vote, 50 to 46. Chuck Schumer led the opposition; the objections were to the conduct of the Iran war and to provisions binding the American and Israeli militaries more tightly together. This is the National Defense Authorization Act, the bill that passes every year almost by reflex, and it came a day after the White House formally notified Congress that it had resumed bombing Iran — undoing the ceasefire the Islamabad memorandum was written to produce. The $87.6 billion the administration requested on 24 June to keep the war going is still sitting in Congress, untouched. So in the space of forty-eight hours Trump lost the money he was going to take from shipping and the money he was going to ask from the Senate. The war is in its fifth month and has, at this moment, no agreed source of funding at all.

None of which slowed the fighting. American forces completed a sixth consecutive night of strikes, hitting dozens of Iranian military targets; Iranian reports say the strikes reached a bridge, an airport and a railway. Trump has begun talking publicly about hitting Pickaxe Mountain, the deeply buried enrichment site near Natanz that sits beyond the reach of the GBU-57 bunker-buster — "a nice big fat shot right in the front door," he said, adding that "we'll probably give Pickaxe a shot relatively soon." Iran has answered by firing at the Gulf states hosting American forces: Qatar, Bahrain, Kuwait, Oman, Jordan and the UAE. On Friday morning Qatar's defence ministry said it had thwarted an Iranian missile attack over Doha; a child was injured by shrapnel from the interception, and a second alert went out to mobile phones hours later. Tehran, for its part, accused the United States of a war crime after a strike landed near a children's cancer hospital in Ahvaz.

The market's verdict is the interesting part. Last week the argument here was that the transit count through Hormuz mattered more than the price, and that a toll on a waterway nobody dares enter collects nothing. The counts did fall steeply once the fighting resumed and Iran began attacking tankers. But the US Energy Department reported that 8.5 million barrels still moved through the strait on Sunday alone, in the middle of all of it. Brent settled at $84.95, up about 12 percent across three sessions and up from the $78.82 of a week ago. That is a real move and a manageable one. The traders who deal in this for a living are saying that the strait is dangerous, not closed — that the world's most important waterway is being run as a shooting gallery and the oil is going through anyway. The $150-a-barrel warnings circulating this week are an analyst's hypothesis, not a price. Iran cannot close the strait and the United States cannot secure it, and the tankers have concluded they will take their chances between the two.

That stalemate is what the outside assessments keep circling. Jonathan Panikoff, a former deputy US national intelligence officer for the Middle East now at the Atlantic Council, argues there is no reason to think the latest strikes will compel Iran to change its thinking and rather more reason to think they will harden it. The Council on Foreign Relations puts it more bluntly: the deal has collapsed and Washington is left with few good options. CNN's reading is that Trump is caught in two traps of his own making, one geopolitical and one domestic — Iran will not fold, and with approval in the 30s, petrol above $4.50 a gallon and opposition to the war climbing, he has no room to keep fighting either. The geopolitical trap is real, but it is the domestic one that is binding now, and this week showed exactly how. A president who cannot win the war, cannot end the war, and cannot pay for the war has one move left, and he made it on Thursday night.

He went on primetime television and talked about China. In an address from the White House, Trump announced the immediate declassification of intelligence documents and said China had "carried out what is believed to be the largest compromise of election data in history," accessing 220 million American voter files — names, addresses, phone numbers, party registration. He said intelligence officials had suppressed it, that CIA and NSA reporting had been kept out of his daily briefings, and he ordered the Director of National Intelligence and the FBI to investigate. He called for the SAVE America Act, with voter identification requirements and restrictions on mail-in voting. Democratic leaders rejected it. The Chinese embassy denied it before he spoke. Fox News, carrying the address, noted it could not verify the claims. And the American intelligence community's own standing finding is that no foreign power has tried to interfere with ballots or vote-counting.

The order matters. Monday: a toll to fund the war without Congress. Tuesday: the toll dies and the Senate refuses the defence bill. Thursday: a primetime address about a Chinese conspiracy against American elections, aimed at a domestic law about mail-in ballots, delivered while American aircraft were over Iran for the sixth night running. This is not a president prosecuting a war. It is a president who has run out of ways to fund one and has changed the subject to the fight he would rather be having, four months before the midterms.

In Kyiv the same week produced the mirror image, and it is the more surprising story. Ukraine is winning. In the last ten days its forces struck the Engels-2 strategic airbase with a Shahed-lookalike drone, hit 147 shadow-fleet vessels, put two Russian crude tankers out of action with Mamai naval drones, and destroyed one of Russia's rare Zemledeliye mine-laying systems; the CIA director noted this week that Russian recruits are surviving twenty to thirty minutes on the front line. And in the middle of that, Volodymyr Zelensky fired Mykhailo Fedorov, the defence minister who had made much of it possible — six months into the job, the man who scaled the drone programme, reformed procurement and cut Russian access to Starlink.

Fedorov did not go quietly. He said the army chief, General Oleksandr Syrskyi, had blocked his attempts to modernise and had issued Zelensky an ultimatum to force him out. "Instead of figuring out how to defeat Russia asymmetrically, which is the army chief's task, he has figured out how to divide the country," Fedorov said. Zelensky's own explanation at a Thursday news conference was that of a man settling a quarrel rather than making a strategy: "just showing that if the sides can't resolve an issue, I will have to resolve it." More than a thousand people filled Kyiv's central square with Ukrainian and EU flags, chanting "shame" and "bring Fedorov back," with rallies in other cities — the first mass wartime protest since the crowds that defended the anti-corruption bureau's independence a year ago. The deputy air force commander, Pavlo Yelizarov, resigned in solidarity. Parliament is resisting a replacement. This is Zelensky's fourth major reshuffle of the war, arriving days after Prime Minister Yulia Svyrydenko resigned after a year; Serhii Koretskyi has been approved to replace her, and Ukraine now prosecutes the largest war in Europe since 1945 with an acting defence minister — the SBU's Yevhen Khmara — and no permanent foreign minister either.

Trump's war is going badly and his authority is cracking. Zelensky's war is going well and his authority is cracking. The battlefield fortunes are opposite and the constraint is identical: in both cases the thing now limiting the commander-in-chief is not the enemy but his own public and his own legislature. Washington cannot pass a defence bill it passes every year. Kyiv cannot seat a defence minister while it is winning. Both leaders spent this week fighting at home, and the enemy in each case was largely of their own making — one by inventing a toll the world would not pay, the other by removing the minister his own country credited with the victories.

Europe, meanwhile, kept doing the unglamorous thing. On Monday in Paris, Ukraine and nine European states — Denmark, France, Germany, Italy, the Netherlands, Norway, Spain, Sweden and the United Kingdom — launched the FREYJA anti-ballistic missile programme, built around Ukrainian manufacturer Fire Point's FP-7.X interceptor, designed to kill a ballistic target at roughly fifteen miles and to be, in the company's words, significantly cheaper and more scalable than a Patriot. They want it flying within twelve months. Emmanuel Macron and Friedrich Merz held their final joint ministerial council and pledged deeper defence cooperation; fifteen hundred British and French troops will deploy to Poland in September for the first Coalition of the Willing exercise; Britain fast-tracked Project Nightfall, a pared-down ballistic missile for Ukraine. The logic has not changed since last week, but the evidence for it keeps improving. A continent that watched Washington attach a price tag to freedom of navigation on Monday and withdraw it on Tuesday has learned something more useful than whether the toll was legal: that the guarantee is now improvised. You do not build your own interceptor with nine partners because you distrust the Patriot. You do it because you have watched the guarantor invent a policy and abandon it inside a day, and you have understood you cannot plan around that.

The rest of the world got on with its own emergencies. The World Health Organization reported that the Ebola outbreak in the Democratic Republic of Congo has passed 2,000 confirmed cases and 796 deaths in two months, spreading faster than any outbreak on record and now the third-largest ever; more than 80 percent of new cases are being found outside known contact lists, which means the chains are being missed, and health workers in Ituri, where most cases are, went on strike over unpaid compensation. The WHO is short more than $400 million. Uganda, which has just discharged its last patient and begun its 42-day countdown to being declared free of the disease, sent fifty health workers across the border. China's second-quarter growth came in at 4.3 percent, under target. TSMC committed another $100 billion to American chip plants. Russia spent the week hitting Odesa's port infrastructure for a fifth straight day, striking three merchant ships under Tanzanian, Liberian and Marshall Islands flags within hours of each other, killing a captain and two crew and bringing that wave's toll to eleven, crippling grain export capacity and pushing world food prices up — while the UN recorded June as the deadliest month for Ukrainian civilians since April 2022, with 293 killed.

What to watch is no longer the transit count. That question got answered: the oil moves, the price sits in the mid-eighties, and the strait has settled into a violent equilibrium neither Washington nor Tehran can break. The thing to watch now is whether Trump brings the NDAA back and what he has to give the Senate to get it — because that is the number that says whether this war has a future, and there is no toll left to collect if it doesn't. Watch whether Pickaxe Mountain actually gets hit, which would be an escalation chosen for want of an exit rather than for any military logic Panikoff or anyone else can identify. And watch Kyiv, where the more dangerous instability now sits: a parliament that will not confirm a defence minister, a general who reportedly delivered his president an ultimatum and won, and a public that has just discovered it will protest in wartime. Russia has failed for four and a half years to divide Ukraine. Fedorov's parting shot was that his own army chief managed it in six months.