Towards a fragile deal or an escalating war?
With hours left of the “ceasefire” with Iran, Trump is zigzagging between announcing that he is “very close to a fair deal” and again threatening to “knock out every power plant and bridge” in Iran.
Seven weeks into this war, the Bonaparte in the White House has created a nightmare for US imperialism. The Strait of Hormuz is a hammer-blow to the world economy which was unequivocally made in Washington. The damage done to US imperialism goes well beyond the economy – “allies” and adversaries alike are watching US imperialism expose its limitations and weaknesses. Trump is fast losing supporters everywhere.
Whether there will be new talks and a prolonged “ceasefire” or not, the war is a complete failure for US imperialism with enormous costs. All factors which led to the war will remain, including a continued military build-up in the region and globally.
US and Israeli bombings have killed 3,753 people in Iran and over 2,000 in Lebanon (as of 18 April), damaged 45,000 housing units in Tehran in March alone and wiped out entire Lebanese towns and villages. Trump has boasted about pushing back Iran decades or even “to the stone age”. Globally, 32 million people have been thrown into poverty and 45 million have been added to those in need for food support, according to the IMF.
Desperately wanting to end this catastrophic war that has achieved none of his targets, Trump suddenly declared a two-week ceasefire on 8 April. He used the Pakistani military regime as so-called mediators, who for their own reasons also want the war to end. However, how negotiations would be able to achieve what US imperialism’s bombings failed to accomplish has never been explained. It is clear that Trump’s aim is to be able to pass off some kind of victory and declare “mission accomplished”, having not only achieved nothing, but actually demonstrably weakened the position of US imperialism.
The Strait Blockade
Only a few days into the war, the Strait of Hormuz quickly became the key issue – not regime change, enriched uranium or Iran’s arms production. With control over the Strait, Iran held a powerful weapon, letting some Indian, Chinese and other ships pass and charging millions in tolls while blocking almost all traffic through the vital waterway. With the ceasefire, Trump declared the Strait opened, while Iran stated any passages would be done under its surveillance. Trump responded with the unexpected step of declaring the US would organise its own blockade of the Strait.
Such a blockade could have an effect on Iran’s economy, but “the longer the blockade continues, the deeper its impacts on the global economy. The war has disrupted global trade, destabilized energy markets, and spread economic strain worldwide. Paradoxically, this dynamic works in Iran’s favour: by globalizing the pain, a prolonged war of attrition becomes a survival strategy rather than a weakness,” the Middle East Monitor summarised.
Over decades of sanctions, the Iranian regime has developed a high degree of self-reliance for its economy and weapons production, not least the development of drones. The economy has been in a deep crisis for a long time, relying on the sale of oil, mainly to China, but the effects of a blockade will take time to hit.
On 19 April, the US blockade was enforced by acts of war, in attacking and seizing an Iranian-flagged container ship, Touska. Tehran’s predictable answer was to double down on its position from when the blockade was announced, closing the Strait once again. Already before the attack, the Iranian regime had announced it would not participate in talks in Islamabad, Pakistan. Pakistani sources, however, have announced that Tehran will attend.
A sharp military response from Iran against US navy ships or military bases, or against US allies in the Gulf could rapidly escalate into full war again. Since the ceasefire, the US has amassed more troops and returned the aircraft carriers Gerald Ford and George HW Bush to the region. Iran has undoubtedly used the ceasefire to recover lost drones and missiles and produce more.
Desperate Search for a Way Out
Neither side has an objective interest in continued war. The Iranian regime can, simply by surviving, declare a victory, added to by its strengthened power over the Strait. US imperialism has used a high proportion of its weapons supply and is shaken by the economic and political effects. This, however, does not mean that the conflict is over or a new escalation is excluded.
Some analysts use the phrase “mutually hurting stalemate”, borrowed from the late diplomat William Zartman. As described by Middle East Monitor, “a situation in which both sides come to recognize that the costs of continued fighting overshadow any feasible gains” is a possible outcome, but this is a stage which has not yet been reached.
Trump’s desperate search for a way out also led him to force Netanyahu into a ten day “ceasefire” in Lebanon. The deal was done without the participation of Hezbollah and the Israeli army has continued to destroy villages and towns, establishing a “yellow line” around the areas it occupies, as in Gaza. In effect, they are establishing a new long-term occupation of southern Lebanon. From there, new attacks can be launched.
Trump’s regular “positive” statements claiming Iran has agreed to almost everything – for example to hand over its enriched uranium – always have immediate effects on stock markets and oil prices. But the war so far, added to by the real gap in positions between Washington and Tehran, who immediately denied any intention of handing over uranium, suggest wishful thinking on the part of the speculators.
Serious Threat to the Global Economy
The war has more long-standing consequences for the world economy than the stock markets are indicating at this stage. “Kristalina Georgieva, the IMF’s managing director, warned that the crisis in the Middle East would still present a “serious threat” to the global economy even if the conflict ended tomorrow.” (Financial Times). A report from United Nations Development Program for the Asia-Pacific region estimates that “8.8 million people are at risk of falling into poverty. Output losses could range from US$97 billion to US$299 billion, equivalent to between 0.3 and 0.8 percent of regional GDP.”
This kind of crisis has never happened at a time of such high levels of debts and deficits, meaning governments have less room to act.
The effects are sharpest in poorer countries and in Asia. Already, governments in 60 countries have taken measures against price hikes, through subsidies, tax cuts etc. The IMF largely argues against these measures, warning of rapidly increased debts and deficits. To follow the advice of the IMF, however, will create discontent, protests and unrest. Already, there have been strikes and protests, for example in the Philippines and Ireland.
The drop in oil and natural gas production has already had huge effects. One immediate effect is the price on jet fuel. “Shukor Yusof from Endau Analytics, an airline advisory firm in Singapore, estimates that air traffic for Asia and the Pacific has already dropped by a third”, the New York Times reported 20 April. The same article reports of a tripling in air ticket prices as well as “empty shelves for products long considered quick and easy to buy worldwide: plastic bags, instant noodles, vaccines, syringes, lipstick, microchips and sportswear.” IAEA chief Mariano Grossi has warned that Europe only has jet fuel for the coming six weeks.
Global Trends
Even if there is some kind of preliminary deal, including a prolonging of the “ceasefire”, the effects of this war will be long lasting. A number of trends are already developing. Some of them are, in short:
- The world economy is heading towards stagflation, increased inflation plus slow or no growth.
- The questioning of alliances with the US: from Europe over this war and Ukraine; the Gulf states, especially if Iran’s control over Hormuz is de facto accepted by Trump; and in Asia over both the economic crisis and uncertainty about security alliances with Washington. At the same time, most of these regimes still desperately rely on US arms, bases and intelligence.
- In most states, the ruling classes will search for increased energy and military self-sufficiency and increase their arms spending. Drone and anti-drone industries will be urgently built. Military strategists will search for “straits” to control.
- The previous “safe haven” of the Gulf states has disappeared.
- China has kept a relatively low profile in this war, but the major conflict between US and Chinese imperialism continues to dominate world events. The Iran war has opened possibilities for short term gains for both China and Russia, both economically and politically. However, both Beijing and Washington are shaken by crises.
- Politicians internationally will need to distance themselves from Trump, even if they stand for variants of the same policies. The defeat of Viktor Orbán was homegrown, but support from Trump definitely did not help.
What happens in the Strait of Hormuz will decide the short term outcome of the war. A deal could provide a temporary pause, but will in no way resolve the reasons for the conflict – but neither would a full resumption of the war. Trump has consciously avoided “boots on the ground”, knowing of both the opposition to the war in the US and the limits of what such an effort could achieve.
In Iran, the bombing has temporarily strengthened the grip of the dictatorship. Israel and the US have assisted in blocking strikes and protests. But the discontent and need for workers’ struggle have not disappeared and will reappear.
ISA stands against US/Israeli imperialism’s war, and for its defeat by an organised working-class movement in Iran, throughout the region and globally. Such an internationalist, anti-imperialist stance goes hand in hand with our socialist opposition to the Iranian dictatorship. This war is again underlining that the only force able to stop war and dictatorships is the international working class.
