The public threats of a military strike against Iran may be a high-stakes negotiating tactic, consistent with Trump's style of creating chaos before seeking a deal. The goal is likely not war, which would be politically damaging, but to force Iran into economic concessions or a new agreement on US terms.
Under Trump, the primary tool for projecting U.S. power is shifting from economic instruments like tariffs to direct military, intelligence, and cyber capabilities. This "Donroe Doctrine" leverages America's asymmetrical advantages in these areas, especially in its hemisphere, to achieve foreign policy wins without relying on economic coercion.
Trump's erratic approach isn't random; it's a strategy to create chaos and uncertainty. This keeps adversaries off-balance, allowing him to exploit openings that emerge, much like a disruptive CEO. He is comfortable with instability and uses it as a tool for negotiation and advantage.
PGIM's Daleep Singh argues that the risk of mutually assured destruction prevents direct military conflict between nuclear powers. This channels confrontation into the economic sphere, using tools like sanctions and trade policy as primary weapons of statecraft.
Contrary to his hawkish reputation, Benjamin Netanyahu is deliberately lowering Israel's profile regarding Iran's internal protests. This strategic silence aims to prevent the embattled Iranian regime from feeling cornered and launching a preemptive attack out of paranoia.
Trump's 'hokey pokey' with tariffs and threats isn't indecisiveness but a consistent strategy: make an agreement, threaten a severe and immediate penalty for breaking it, and actually follow through. This makes his threats credible and functions as a powerful deterrent that administrations lacking his perceived volatility cannot replicate.
U.S. foreign policy actions against Venezuela and Iran are not primarily about democracy but are strategic moves to disrupt the flow of cheap, sanctioned oil to China. By controlling these sources, the U.S. can directly attack a key adversary's economic and military engine.
Donald Trump's seemingly chaotic tariff policy functions as a 'mixed strategy' in game theory. By introducing randomness and forcing a response, he makes other nations reveal their true intentions, distinguishing allies willing to negotiate from rivals who default to immediate hostility, such as China.
Contrary to popular belief, Trump's trade strategy isn't protectionism. He uses reciprocity, leverage, and executive flexibility to force other countries to lower their own trade barriers, ultimately aiming for a world with freer trade for the U.S.
Contrary to the isolationist interpretation, "America First" under Trump is a doctrine of pragmatic, and often aggressive, foreign intervention. It justifies actions like controlling another country's resources if they are deemed critical to American national security or economic stability.
Despite heightened U.S.-Iran tensions, oil prices show only a minor risk premium (~$2). The market believes an oversupplied global market, coupled with a U.S. preference for surgical strikes that avoid energy infrastructure, will prevent a major supply disruption.