The suggestion that all cargo transiting the Strait of Hormuz should pay a 20% fee to the United States is effectively a proposal for a transit toll. It is difficult to envision this concept being implemented, and markets currently appear to be assigning little probability to it. However, as a theoretical exercise, we can consider its potential consequences if it were to become reality. The most immediate impact would be a rise in shipping costs through the strait, which would have broad repercussions for both stocks and bonds. Beyond crude oil, other commodities would also be significantly affected.

Increased transport costs would make crude oil and its derivatives more expensive. Fertilizer prices would climb, as would the cost of sulfuric acid, a crucial input in some mining operations. This implies, at a minimum, higher copper prices. Copper is essential for automobile manufacturing and real estate construction.

Consequently, imposing a 20% toll on all cargo ships passing through the Persian Gulf would constitute at least a one-time supply shock, with a clear risk of triggering secondary inflationary effects.

For the United States, this scenario would likely lead to higher interest rates and short-term bond yields, declining stock prices, and a potentially stronger US dollar. On another front, with midterm elections approaching in November, the US stock market and economic growth may rely more heavily on the momentum from the artificial intelligence boom for support.

Globally, the impact would be felt more acutely. Equities in emerging Asian markets could be hit hardest. Additionally, bond yields would rise, and inflation risks would need to be priced in. European stocks and other emerging markets would also face pressure, even if the ultimate cost increases for inputs like fertilizer are passed on to consumers.