THE ILLOGIC OF MERCANTILISM.

Yesterday, Our President floated the idea of collecting payment for escort services.  I'm referring to the Arabian Gulf, get your mind out of the gutter.  National Review's Andrew McCarthy promptly and correctly flagged that proposal as illegal.

The strait was open when Trump decided to start the war. This was to the great advantage of the United States, a trading colossus with the world’s most formidable economy. If Trump were to impose tolls, fees, taxes, or whatever he deigns to call them — i.e., if he were to do exactly what Iran has been trying to do — that would induce other nations to extort payments for transit through international waters and straits of importance to international trade where they are in a position to intimidate shippers. Free trade would break down, which would be a catastrophe for nations heavily engaged in international trade, such as our own.

Congress should authorize the use of military force to keep the strait open. Still, regardless of whether one thinks the president has authority to use force to remedy a problem he created (because, however we got to this point, it is in America’s vital interest to keep the strait open), he has no authority to toll the strait, as he proposes to do.

It is entirely possible that Congress should enact legislation and/or that a binding international treaty should be forged that would reimburse the U.S. for security costs. I doubt that; I’d estimate that the benefits that the U.S. receives from free transit across the world far outweigh the costs of discouraging Iran from tolling the Hormuz Strait. But wherever you come out on that equation, a president has no authority to dictate transit taxes, and trying to do so is a provocation both constitutionally and in international relations.

I'll leave it to people who pay more attention to international affairs to evaluate whether that strait was open out of parties mutually looking the other way, the mullahs at infidels buying their oil, and the customers at the mullahs developing nuclear weapons.

Less than a day later, the presidential weave erased the tolling.

President Donald Trump is changing course on seeking a 20 percent reimbursement toll in the Strait of Hormuz after a conversation with Middle Eastern allies, he announced on Tuesday.

“Based on highly productive conversations with Middle East leadership, 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,” he posted to Truth Social.

On Monday, Trump posted that “as a matter of FAIRNESS, will be reimbursed, at the rate of 20 percent on all cargo shipped, for any and all costs necessary to do the job of providing safety and security to this very volatile section of the World."

In the Oval Office on Tuesday, while meeting with Iraqi Prime Minister Ali al-Zaidi, he said he had heard from leaders of other nations who preferred an investment approach instead.

"The Gulf States are going to invest a tremendous amount of money into the United States, and that was very satisfactory to me. I think it's actually much better,” Trump added.

The White House have not yet posted the full transcript of his press availability with the current prime minister of Iraq, perhaps because the translators have to go through the tape.  But during that conversation, Our President noted he had some reservations about going to the tolls, perhaps in recognition that the United States Navy have a tradition of keeping international waters international, even at some expense to taxpayers.

That foreign investment from Gulf Arab states?  Is it impertinent of me to suggest that those countries might get their hands on dollars to invest in these United States by selling crude oil to the United States?  Trade theory is hard.  Our President, though?  Mercantilist to the core.

President Trump explains why he changed course on the Strait of Hormuz:

"It was never fair to me that we would be guarding the Strait, when we basically don’t need the oil at all [...] It was important for allies, it was important for people that we get along with very well, including the major Gulf state countries [...]

The Gulf states are going to invest a tremendous amount of money into the United States, and that was very satisfactory to me. I think it’s actually much better."

As of 1500 hours DeKalb time, the blockade of Iranian shipping is in effect again, and we'll see what sort of missiles fly overnight.  We'll give Reuters credit for this evening's understatement.

Renewed attacks since last week have increased doubts that a memorandum of understanding signed last month would lead to a permanent halt in the war, which has disrupted global energy supplies and stoked inflation fears globally.

Regional analysts say the hostilities remain within controlled boundaries, for now, with both sides seeking leverage for an eventual peace deal, but warn there is a risk that fighting could spin out of control.

It's not that fighting was really under control the past few months, and the internal squabble over Iranian succession is still under way, no matter how bravely their figureheads posture.