The Toll Collector's Complaint

usapolitics.news — Analytical Journalism

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"It's an international waterway. No country is allowed to charge tolls or fees on an international waterway. That's existing international law. That's the way it is."
— Marco Rubio, Abu Dhabi, June 23, 2026

On Tuesday, Secretary of State Marco Rubio arrived in Abu Dhabi and made a declaration that will require some explaining. "It's an international waterway," he said of the Strait of Hormuz. "No country is allowed to charge tolls or fees on an international waterway. That's existing international law. That's the way it is in international waters all over the world."

He is correct that freedom of navigation is a principle of international law. He is incorrect that no country charges tolls on international waterways. The Panama Canal charges between $150,000 and $1 million per transit depending on vessel size. The Suez Canal generates $8 to $10 billion annually in tolls from international shipping. Both have been charging fees for decades. Neither has been described by the United States government as a violation of international law.

The distinction Rubio is reaching for — and not quite articulating — is that the Panama Canal and Suez Canal are artificial waterways built and operated by sovereign states, while the Strait of Hormuz is a natural waterway. Under the UN Convention on the Law of the Sea, vessels have a right of transit passage through straits used for international navigation, and coastal states cannot impede or charge for that passage. That legal framework exists. It is real. Rubio is not entirely wrong.

He is, however, selectively committed to it.

The dispute arises from the ceasefire memorandum of understanding signed last week. Iran has proposed fees for maritime services in the strait — navigation assistance, environmental monitoring, traffic management — suspended for sixty days while talks continue. Tehran has been explicit: the strait will not return to its prewar status quo. The question of what happens on day sixty-one is the central unresolved tension in the ceasefire talks.

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Rubio's statement was made in Abu Dhabi on Tuesday. It arrived days after his own president had proposed the opposite. Last weekend, Trump threatened to impose American tolls on the Strait of Hormuz if a peace deal was not reached within sixty days, describing the revenue as payment for "services rendered as the Guardian Angel to the countries of the Middle East." The Secretary of State then flew to the Gulf to tell its governments that no country is allowed to charge tolls on an international waterway. The president and his secretary of state have not publicly reconciled those two positions.

The Panama Canal sits in the same paragraph. Trump has called its fees "ridiculous" and a "complete rip-off," threatening to take back the canal from Panama on the grounds that American ships are being overcharged. The Panama Canal Authority charges the same rates to all vessels regardless of flag — American, Chinese, Panamanian, or otherwise. There is no surcharge on American ships. The fees are not a violation of international law. They are the operating revenue of a sovereign infrastructure project built and owned by Panama. Rubio's principle — that no country may charge fees on an international waterway — if applied to Panama, would prohibit the canal tolls Trump has been objecting to for two years. It has not been applied to Panama. It has been reserved for the waterway where Iran sits on one shore.

Then there is the 12-mile question. The United States claims exactly the same territorial sea as Iran — 12 nautical miles from its coastline, standard under the international framework Washington follows in practice. The Strait of Hormuz is between 21 and 55 miles wide. At its narrowest point, the 12-nautical-mile claims of Iran and Oman from their respective shores overlap entirely. There is no strip of high seas in between. The entire waterway passes through the territorial waters of coastal states. The legal principle Rubio invoked in Abu Dhabi to tell Iran what it cannot do in its own territorial waters is the same principle under which the United States asserts identical sovereignty 12 miles off its own coast. That symmetry went unmentioned.

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The Suez Canal's situation adds a third data point. Egyptian canal revenues have collapsed by roughly 60 percent since late 2023, when Houthi attacks on Red Sea shipping caused major carriers to reroute around the Cape of Good Hope. The Houthi campaign — which the United States has been striking at intermittently without resolving — has cost Egypt billions in lost toll revenue, destabilizing an economy already under severe IMF-supervised austerity. Egypt charges tolls. Egypt loses those tolls when the region is destabilized by conflicts the United States is party to. No American official has described Egypt's right to collect canal fees as a violation of international law.

For shipping lines that chose neither Suez nor Panama during peak disruption, the alternative was the Strait of Magellan — which charges no toll at all, being open ocean at the southern tip of South America. It adds roughly forty days to a voyage and approximately two million dollars in additional fuel costs. Freedom of navigation through international waters is, in this sense, available to anyone who can afford it.

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The ceasefire framework gives negotiators sixty days to resolve the Hormuz question, along with Iran's nuclear program and the terms of sanctions relief. Rubio is in the Gulf this week reassuring allies — the UAE, Kuwait, Bahrain, all of whom were struck by Iranian missiles during the war — that the prewar status quo will be restored. Saudi Arabia's foreign minister has said the Gulf states will only accept that outcome. Iran's chief negotiator has said it will not happen.

Trump posted on Truth Social that there will be "NO TOLLS in the Hormuz Strait" in capital letters, which is a statement of political intention rather than a legal analysis.

The sixty days end in late August. What happens then depends on whether Washington and Tehran can agree on the thing neither side has yet agreed on: what the postwar Strait of Hormuz actually is — a waterway Iran controls and can administer, or a global commons it happens to border. One reading is supported by geography and Iranian sovereignty claims. The other is supported by Rubio's statement in Abu Dhabi and sixty years of American strategic doctrine in the Persian Gulf.

Both Panama and Suez will continue charging tolls while that question is resolved. The principle Rubio invoked on Tuesday has not been applied to either of them. It has been reserved, with some precision, for the waterway where Iran sits on one shore.

The Strait of Magellan remains free of charge. No one is transiting it.

Sources:

Rubio's Abu Dhabi statement

  • PBS NewsHour — Rubio "no country allowed to charge tolls," June 23, 2026
  • Al Jazeera — full context of Hormuz toll dispute; MOU clause "60 days only," June 24, 2026
  • Times of Israel — Ghalibaf "will never return" to prewar status quo, June 23, 2026
  • Washington Examiner — Trump Truth Social "NO TOLLS in the Hormuz Strait," June 23, 2026

Trump's Hormuz toll threat

  • CBC News — Trump threatened American tolls on Hormuz, "services rendered as the Guardian Angel," June 24, 2026

Iran's proposed fees and MOU

  • Al Jazeera — Iran's Persian Gulf Strait Authority fees suspended 60 days; MOU fifth clause, June 24, 2026
  • Libertarian Institute — Strait less than 24 miles wide; territorial waters argument, June 23, 2026

Panama Canal

  • Lloyd's List — Trump "ridiculous" and "rip-off" fees; canal toll context, December 2024
  • Atlantic Council — Panama Canal Authority rates uniform and nondiscriminatory; no surcharge on American ships, February 2025
  • Fox Business — Trump Truth Social Panama Canal post; "complete rip-off," December 2024
  • NPR / Planet Money — toll structure explained; American ships pay same as all others, March 2025

Suez Canal

  • Suez Canal Authority statement, confirmed by Euronews, Middle East Eye, Arab News, and Ahram Online, April 2025
    Figure: Revenue fell from $10.3 billion in 2023 to $4 billion in 2024 — a 61 percent decline
    Cause: Houthi attacks on Red Sea shipping from November 2023 onward; 50 percent drop in vessel traffic

12 nautical miles / UNCLOS

  • Standard international maritime law; US practice under UNCLOS framework — no single source required but Libertarian Institute piece confirms Iran's territorial waters argument

Strait of Magellan

  • General knowledge