Introduction
The Iran-U.S. war, contrary to the enemy’s initial calculations, did not lead to a quick and low-cost victory. Instead, it clashed with the Trump administration’s core domestic policies and imposed heavy economic and political costs on the U.S. economy. This article analyzes the Trump administration’s domestic policies, their conflict with the war’s consequences, and the factors that ultimately pushed him to accept negotiations.
1. Trump’s Domestic Policies Caught Between War and the Economy
Trump’s main priorities in his second term included: stock market growth, economic prosperity, the rise of right-wing governments in allied countries, expanding influence to gain more resources and resolve the budget deficit, lowering interest rates, reducing the government’s budget deficit through lower rates, tariffs, trade wars using tariffs as leverage in negotiations, tax cuts, massive investment in infrastructure including artificial intelligence, and expansionist wars (Latin America and Iran).
Most of these policies are inherently inflationary. The closure of the Strait of Hormuz also caused inflation, higher interest rates, and increased borrowing costs, effectively putting it in direct conflict with all of Trump’s core policies and leading to the failure of his domestic and foreign agenda. Moreover, the issue of Iran was not a priority aligned with these policies. Ultimately, this raised a question in the minds of American citizens and Trump supporters: what was all this expense for?
2. The Artificial Intelligence Economy Under Threat from War; Rising Energy and Financing Costs
In recent years, the U.S. economy, through massive investment in artificial intelligence—about $1.4 trillion over the three years leading up to 2027—turned this sector into a driving force for economic growth, job creation, and recession prevention. However, rising energy prices have increased the cost of using AI, making it uneconomical in many cases. On the other hand, this industry still does not generate revenue commensurate with its costs, and with rising interest rates, its financing costs also increase. The worst-case scenario is a rush by investors to withdraw capital from funds that were already in crisis even before the war—examples include Blackstone and Silicon Valley Bank. During the war, withdrawal requests from some funds reached 14%, and managers imposed a 5% cap to prevent collapse. Interestingly, most of these companies belong to billionaires who played a role in starting the war and considered it a long-term investment, but later pressured Trump to stop the war.
3. The Domino Effect of Pressure on U.S. Allies Following the War-Induced Energy Crisis
U.S. allies, being tied to the same financial system, face similar conditions. This pressure first affects the weaker links in the chain, and its effects then spread to the U.S. like dominoes. OECD countries, which account for over 40% of global oil consumption, hold only 60 to 70 percent of the world’s oil reserves. This imbalance means that other countries will face oil shortages sooner and will be forced to resort to rationing or export bans.
4. Cost-Benefit Calculations; Why Negotiations Were Accepted
Confrontation with Iran and the closure of the Strait of Hormuz imposed heavy direct and indirect costs on the aggressors’ economies. Projections indicate that their economies will shrink in the remaining months of the year, and these costs will multiply in the coming years.
During the war, rising energy prices caused up to $2.2 trillion in damage to the global economy. If the blockade continued and reserves ran out, this figure would reach 6.95 percent of global GDP, equivalent to $6.95 trillion. For the aggressor countries on the Persian Gulf rim, this cost is estimated at 5 to 10 percent of GDP. The Eurozone, with growth slowing from 1.3 to 0.5–0.9 percent, would suffer losses of $680 to $1,360 billion. The U.S. economy would incur $195 to $350 billion in costs depending on the duration of the closure and that is without accounting for the loss in financial asset values such as stocks and bonds.
In contrast, Iran’s economy, according to Western estimates, suffered 10 percent damage, equivalent to $34 billion. The total cost of the JCPOA losses at least $700 billion, according to Trump and the 12- and 40-day wars, compared to the West’s multi-trillion-dollar costs over the next two years, is negligible and appears as a rational option in the enemy’s material calculations.
However, the U.S. had other goals in accepting the agreement: first, to strip Iran of its nuclear-equivalent leverage by downplaying its importance; second, to reopen the Strait before ships decided to pay Iran for passage because revenue for Iran would mean the failure of the U.S. strategy; and third, to postpone maximalist demands to the future and avoid the multi-trillion-dollar cost of a prolonged closure.
5. The Foundations of U.S. Weakness at the Outset of War
The U.S. entered this war while it was not in a favorable economic or political position. Inflation had exceeded the 2 percent target for four consecutive years, and interest rates had risen over the previous three years. In 2026, a 0.25 to 0.75 percent rate cut was expected to restore stability to economic sectors, but the war disrupted this expectation. The government’s $40 trillion debt, accumulated with an annual deficit of $1.8 trillion, represented the greatest financial vulnerability. In addition, trade wars with China and India and competition with European allies had complicated the international environment for the U.S., and any new conflict—especially with Iran—could push these pressures to an unbearable level. Strategic oil reserves were also at their lowest level since 1983, and American society was in its most polarized political state in decades. The stock market bubble and the dependence of more than 60 percent of stock indices on the technology sector—which itself is heavily dependent on energy prices were factors that made any continuation of the war an extremely costly gamble for the U.S.
Conclusion
Material calculations, which form the basis of the enemy’s decision-making, pushed them to postpone ideological and geopolitical demands. The arrival of summer known as the driving season in the U.S. economy accelerated consumption of oil, gasoline, diesel, and jet fuel, making rationing or price increases unavoidable. Continued war would fuel inflation, reduce consumer spending, and set the stage for a severe financial market crash in the fall, reversing the narrative-based economic war strategy.
The U.S. acceptance of the agreement was a direct result of these calculations: an agreement with Iran was far less costly than the enormous economic, political, and military price of continued confrontation. Ultimately, material calculations brought them to the negotiating table, leaving an important lesson for the future: The Strait of Hormuz reflects the pressure of sanctions back onto the economies that impose them.
