WATCH: Trump says he's reversing course on Strait of Hormuz fees because Gulf states will invest in U.S.

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President Donald Trump said Tuesday that Gulf allies asked him to move from tolls to trade deals when it came to the Strait of Hormuz.

Watch the clip in the video player above.

The president explained his thinking in backing away from a 20% toll on cargo passing through the Strait of Hormuz, saying he was called by "kings and emirs" and other leaders who suggested an alternate arrangement.

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"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," Trump told reporters in the Oval Office on Tuesday.

Trump said he prefers that arrangement to the tolls he previously said the U.S. would impose. "I like that actually, because I don't think anybody should be able to charge a fee for the strait," Trump said.