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Friends,
Trump’s war with Iran — which he originally promised would be over in “four to five weeks” — has now entered its third month. Iran and Trump are engaged in a massive game of chicken — and time seems to be running out for both sides.
The consequences of the war for Iran’s economy are far worse than for America’s, but Iran’s dictatorship presumably can withstand public pressure more easily than Trump can, especially with midterm elections in the U.S. in less than six months. Sixty percent of Americans disapprove of Trump’s handling of the war.
The International Monetary Fund projects that Iran’s economy will contract 6.1 percent this year and inflation will reach nearly 70 percent. Iran’s currency, the rial, has hit record lows (around 1.32–1.8 million to the dollar), resulting in massive layoffs, high unemployment, and acute shortages of essential goods and medicine.
In the United States, the average price of gasoline has climbed to more than $4.55 per gallon, up over $1.50 since the war began in late February. Driven by a surge in energy costs from the war, inflation rose in April to an annual rate of 3.8 percent, up from 3.3 percent in March — marking the highest rate of inflation since May 2023 and making it unlikely that the Federal Reserve will cut interest rates this year.
So what will Trump do now? The man who claims he knows better than anyone how to make a deal has so far been outmaneuvered by the regime he says he toppled.
I’ve summarized below the four main options now open to him, according to specialists in foreign policy and the Middle East. ...
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