- Trump started this military campaign without congressional backing or NATO support; The strategic intent behind the conflict remains unclear
- With midterm elections looming, a prolonged military campaign risks disrupting global supply chains and driving inflation higher
- Energy is the key transmission channel for growth shock – Asia is the most exposed, Europe shows improved structural resilience, and the US remains insulated but faces inflation risks
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Rising risk of another “forever war”. Trump rode on the “American First” platform and promised “no wars” in the Nov 2024 Presidential election. But barely more than a year later, the US has been embroiled in multiple military conflicts and the ongoing Iranian war is the largest till date. A war of choice, Trump started this military campaign without congressional backing and the support of NATO allies. The conflict is currently in its fourth day and yet, the administration is still struggling to put forward a coherent response on the strategic intent behind this conflict.
Initial assertions of Iranian missiles potentially reaching American soil were refuted by intelligence agencies and the narrative has since pivoted to “regime change” as the strategic intent. The contradiction and shifting of goalposts did not stop here. When asked about the duration of the campaign, Secretary of Defence Hegseth said it would not be an “endless war”. And yet, Trump separately declared that the war could go on much longer and vowed a Draghi-style “whatever it takes” stance for the Iranian campaign.
With a looming midterm election in November this year, such absence of strategic clarity is potentially risky for the Trump administration. A prolonged military campaign (as opposed to the initial calculation of a quick campaign) will upend global supply chains and drive inflation higher, this coming at a time when Americans are struggling with an affordability crisis. Above all, the risk of embroiling in another Iraq-style “forever war” may cost American taxpayers c.USD2.9tn – a luxury the country can ill afford given record high national debt.
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