Trump’s war in Iran exposes US’s shift from a global guardian to an arbiter of chaos | US-Israel war on Iran
Government in Delhi to protect ordinary Indians from war in Iran directed consumables Liquefied gas, the main cooking fuel for Indian families, is limiting supplies to the plastic industry. Nepal government rationed gas and the Philippines cut government work week up to four days. Bangladesh closed universities and rational fuel.
They were most affected by Iran Closing the Strait of Hormuz. Economies in Asia importing more than a third On average, Korea imports four-fifths of the energy they consume; Japan nine out of ten; Thailand 55%. Most of this comes from the Gulf. According to the International Energy Agency, approximately 80% of the oil and petroleum products passing through the strait in 2025 would go to Asia. However, traffic in its waters 90% crashed.
Europe is less dependent on fuel from the Middle East. But it is heavily dependent on imported oil and, more importantly, natural gas, whose price is rising. rose Since the US and Israeli bombardments began in Iran. This situation is also reflected in the stock markets. As of March 20, the MSCI index of European stocks had fallen by nearly 11% since the beginning of the war; This was larger than the 9% decline of the MSCI Asia index.
So far, the developed economy that has shown the most resistance while the war in the Middle East has caused damage to energy markets is the United States. The S&P 500 index has lost a relatively modest 5% since the start of Trump’s war. This reveals a lot about where we are going.
The data points to the relative resilience of the U.S. economy and, in particular, the abundance of domestic natural gas, which meets about 36% of energy needs. insulates it It is largely due to the variability of international prices.
But it adds a disturbing chapter to the master narrative of the world economy. This is a story in which the United States, once the guardian of a rules-based global order, has taken on the role of its own enemy, recklessly wreaking havoc among friends and foes while doing relatively little harm to itself.
The tariff barrage that Trump launched in April last year (the first salvo of America’s new campaign against the world) will cost the United States. economists Outside Trump’s orbit They concluded that U.S. consumers and businesses are paying the price. The overwhelming majority of tariffs. But given that many countries’ exports to the United States have fallen, the economic damage is widespread.
According to data from the International Monetary Fund latest revisions The US economy emerged largely unscathed, according to growth forecasts. In January, before the US began bombing Iran, the IMF predicted that American GDP would grow 2.4% this year; this is almost 0.4 points higher than the October 2024 forecast. In contrast, according to the IMF, economic growth prospects this year in Britain, Japan, Canada, India, the Eurozone and Latin America have weakened since Trump took office.
More pain is on the way. The World Trade Organization (WTO) is the ultimate multinational organization. assess the damage The result of the war started by the United States and Israel. If energy prices remain persistently high, growth in goods trade is forecast to slow from 1.9% to 1.5% this year. North American export growth will slow slightly, from 1.4% to 1.1%. Europe will be stuck with exports shrinking by 0.6% instead of growing by 0.5%.
The hit to growth will be equally disproportionate: Expensive energy will slow GDP growth in Asia from 3.9% to 3.1%, while pushing GDP growth in North America from 2.3% to 2.5% this year, according to the WTO. In Europe, expensive energy will bring the economy to a near halt, slowing growth to 0.4% from the previous forecast of 1.6%.
Economic growth is not the only measure of the turmoil caused by the bombing of Tehran. Approximately 70% of Brazil’s and 40% of India’s urea imports, required for its agricultural sector, come from the Gulf via the Strait of Hormuz. Gulf countries import most of their food: 75% of their rice and more than 90% of their corn, soybeans and vegetable oils come from the strait.
In addition to all this, due to the negative effects of the war on the regional economy, countries such as Bangladesh, India and Pakistan will be affected by the inevitable decrease in remittances sent by millions of their citizens working in the Gulf countries.
Disrupting the oil and gas economy isn’t even good for the climate. Eco-warriors can bet this will encourage the world to embrace renewable energy sources. But the immediate effect in Asia was at least a revival. interest in coal.
How much should this change the way we look at the world? Once upon a time, America’s allies in the liberal west have been forced to admit that Trump’s America is no longer a reliable partner serving international stability, but perhaps the main source of global uncertainty.
They realize that Trump will offer all kinds of ridiculous excuses to justify his aggression. He justified bombing Iran by arguing that Iran posed an imminent nuclear threat. destroyed its nuclear program last year. He wants to create a new customs wall after the Supreme Court used some methods to defeat his previous efforts. fake argument about forced labor.
Who knows what excuse he’ll come up with next, like when he remembers that he wanted this too. capture greenland and the Panama canal.
It would be crazy to believe that this episode of wanton aggression is a strange phenomenon, that US aggression will end after the 2028 elections, or perhaps earlier if the Democrats manage to take over Congress in November. The tens of millions of Americans in the Maga base are motivated by their perceived disdain for the rest of the world as traitors, abusers, and, well, “the other.”
This political power is not going away anytime soon. In addition to China taking Taiwan and Russia wanting the Baltic countries, “the USA coming out of a hat and causing hell” should also be added to the world’s risk premium.
