Trump Seizes Frozen Iranian Assets to Compensate Shipping Firms

US President Donald Trump has announced that his administration will use frozen Iranian assets to compensate shipping companies for damages incurred in the Strait of Hormuz. This move marks a shift from previous attempts to fund security operations through cargo fees or insurance.

The idea to tax global commerce was floated by Trump on July 13, but it only lasted 24 hours before being scrapped. In contrast, redirecting funds from Iranian assets is seen as a more targeted approach, rather than taxing the global economy.

The US has been building financial infrastructure around the Gulf crisis since March, when the International Development Finance Corporation signaled its readiness to offer up to $20 billion in political risk insurance for vessels operating in the region. The compensation from frozen Iranian assets will add another layer to this financial response.

This move is seen as a significant step beyond traditional sanctions enforcement and has parallels with the Treasury Department's growing comfort with targeting crypto wallets tied to sanctioned entities.