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Correspondent

23 August 2024 at 4:29:04 pm

Chaos Diplomacy

Donald Trump has always understood one thing better than most modern politicians that markets respond to perception. In the grinding drama over Iran, the American president appears to have weaponised uncertainty itself. One day he hints at a diplomatic breakthrough with Tehran and signals the reopening of the Strait of Hormuz which causes investors to breathe a sigh of relief. However, hours later, he reverses course by declaring there is “no rush” for a deal and that restrictions will remain...

Chaos Diplomacy

Donald Trump has always understood one thing better than most modern politicians that markets respond to perception. In the grinding drama over Iran, the American president appears to have weaponised uncertainty itself. One day he hints at a diplomatic breakthrough with Tehran and signals the reopening of the Strait of Hormuz which causes investors to breathe a sigh of relief. However, hours later, he reverses course by declaring there is “no rush” for a deal and that restrictions will remain until Iran bends fully to American conditions. The markets wobble again Trump’s defenders may argue that unpredictability is a negotiating tactic. Henry Kissinger once cultivated strategic ambiguity during the Cold War. Richard Nixon perfected the so-called ‘madman theory’ to keep adversaries guessing. Yet Trump’s oscillations differ in both scale and intent. In recent weeks, analysts and ethics experts in the United States have raised uncomfortable questions about whether political messaging is increasingly shaping market volatility in ways that benefit insiders, speculators and politically connected traders. When geopolitical brinkmanship begins to resemble a financial instrument, public trust in democratic institutions erodes. Nearly a fifth of the world’s oil passes through Hormuz. A closure or blockade affects fuel prices in Mumbai as much as manufacturing costs in Shanghai or inflation in Berlin. Trump’s repeated shifts between escalation and reconciliation have had grave implications for India, which imports more than 80 percent of its crude oil requirements. Any prolonged instability in Hormuz translates directly into higher import bills, inflationary pressures and stress on the rupee while ratcheting prices of essentials. India has spent years carefully balancing its ties between Iran, the Gulf monarchies and the United States. Tehran remains important for connectivity projects such as Chabahar Port and for India’s access to Central Asia. But allies and adversaries alike are forced into a perpetual state of recalibration because American policy itself appears unstable. Trump’s Iran manoeuvring reflects a dangerous transformation in global politics, which is the merger of geopolitics with spectacle capitalism. International crises are increasingly consumed like market-moving entertainment. This may generate short-term leverage for him or even produce tactical victories at the negotiating table. Iran, under immense economic strain, reportedly agreeing in principle to surrender its highly enriched uranium stockpile is no small development. Yet diplomacy built on volatility carries long-term costs and lead to the weakening of institutions. Markets become addicted to chaos and chaos, once normalised, rarely remains controllable. The world’s largest economy cannot afford to conduct foreign policy like a reality television script, with cliffhangers designed to manipulate sentiment every news cycle. Great powers are supposed to provide stability, not amplify uncertainty for strategic theatrics. Trump may believe that time is on America’s side. But for an anxious global economy already strained by wars, inflation and fragmentation, time spent trapped in manufactured uncertainty is becoming increasingly expensive.

Endgame Mirage

Donald Trump likes to claim he has already “won” the war with Iran. The trouble is that no one, least of all his own administration, seems quite sure what that victory means while his European allies are tuning him out.


Barely a month into a conflict that began with joint American and Israeli strikes on February 28, the White House has offered a masterclass in inconsistency. At various points, Trump has said the war would last “four to five weeks,” could go on “far longer” and would end “very soon.” He has insisted the United States is not at war even as he describes ongoing “military decimation” of Iran.


The objectives, too, have shifted - from curbing nuclear ambitions to hints of regime change, and then back again. Trump appeared to believe that a short, sharp campaign like his Venezuelan coup could deliver decisive political results. Instead, the conflict has followed the oldest script in modern warfare: initial military success followed by strategic drift. Iranian retaliation across the region, including attacks on shipping and Gulf infrastructure, has widened the theatre of conflict and raised the costs. Energy and oil markets have been rattled across the globe, particularly in Asia.


So far, Tehran appears to be succeeding on its own terms. The regime has absorbed weeks of missile and drone strikes without collapsing. Its command structures remain intact. Authority has been decentralised, allowing operations to continue under the Revolutionary Guards even as senior figures are killed. If anything, the war has hardened the system. Power has consolidated around more uncompromising elements of the Iranian regime, reducing the already slim chances of internal moderation.


By repeatedly declaring victory while continuing military operations, Trump has weakened his own leverage. Iran, far from capitulating, has hardened its demands, calling for sovereignty over key waterways and even reparations. The gap between American claims of success and the messy reality on the ground has only emboldened Tehran.


Trump’s most damaging mistake is perhaps institutional. By refusing to clearly define the conflict as a ‘war,’ the administration has sidestepped congressional oversight while conducting sustained military operations. This semantic evasion may offer short-term flexibility, but it corrodes democratic accountability. Wars that are not called wars have a habit of becoming open-ended commitments. Even on the battlefield, coherence is lacking. Trump has oscillated between threats of a “final blow” and sudden pauses in attacks to facilitate talks. Deadlines are announced and extended. The result has been a stop-start campaign that has confused both adversaries and allies.


The greatest irony is that Trump entered office railing against “endless wars.” Yet his handling of Iran risks creating precisely that: a conflict without a clear endpoint, fought for shifting objectives, and sustained by inertia rather than design.


Unless the United States defines a credible endgame and aligns its rhetoric with reality, it will remain trapped in a conflict of its own making.

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