US President Donald Trump says he withdrew the proposed 20 per cent reimbursement fee after being offered bilions of dollars worth of investment by Gulf states.

“We’ve been doing that for many, many years. It was never fair to me that we would be guarding the Strait … we don’t need the oil, at all,” he tells reporters. “It wasn’t important for us, but it was important for allies … including the major Gulf state countries.

“I put it out yesterday and I thought it was good. I was called by different people, different countries … they said, ‘We’d love to do it a different way, we’d love to invest in the United States with billions and billions of dollars … and we would like to invest tremendously in the United States as opposed to charging a fee.’“

Trump adds that he prefers this option as “nobody should be able to charge a fee for the Strait”.

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