Trump's War on Iran: Clear Evidence of Systematic Policy Failures

War Against Iran Threatens Global Supply Chains

With his surprise military strike against Iran, Donald Trump has put not only the U.S. but also the rest of the world in a difficult situation. The war quickly spread like wildfire, engulfing the entire Gulf region. The complacency of wealthy oil-rich emirates and their promises of peace and prosperity have been abruptly challenged. Furthermore, the near-total closure of the Strait of Hormuz is blocking one of the world economy’s most critical transport corridors: in normal times, approximately 20 to 25 percent of global oil and gas shipments pass through this maritime chokepoint. The main consumers are primarily India, China, and other Asian countries, which are already experiencing shortages. These facts are well known and are reflected in the sharp rise in oil and gas prices over the past four weeks (see Figure 1: Sharp Rise in Oil and Gas Prices).

The price and supply shock from the Gulf region is already spreading to the global economy and acting as an acute source of strain—not least due to rapidly rising diesel prices: Diesel remains a key fuel for the global economy. Price spikes and shortages there are not only weighing on the transportation sector but are also driving up the cost of numerous goods and food items. This effect is already noticeable when shopping at the supermarket and is fueling concerns about a renewed rise in inflation.

There is another factor to consider: in addition to oil and gas, the Gulf region is also a source of key raw materials—including phosphate and ammonia. Both are essential for fertilizers and other basic materials. Major producers such as Qatar have already had to shut down facilities, which is abruptly limiting the global supply of ammonia. Saudi Arabia, a major phosphate supplier, is also suffering from war-related restrictions. This could have serious consequences, because fertilizer, as the foundation of global agriculture, is not only an “irreplaceable” but also a “time-critical” product: If fertilizer supplies fail to arrive, the agricultural sector suffers, which inevitably leads to rising food prices. This risk appears to be only gradually being recognized by global financial markets—but an escalation is foreseeable. This factor, too, is driving global inflation expectations—as evidenced by the recent sharp rise in interest rates.

From the U.S. perspective in particular, the purely material costs of the war are also significant, having already reached well into the tens of billions after just a few days. Meanwhile, the U.S. Secretary of Defense has even requested a budget of $200 billion for the war in Iran, which will further drive up both the national debt and the U.S.’s interest payments (see Chart 2: U.S. Government Interest Payments).

Lack of impulse control or geostrategy?

When considering these serious challenges, three crucial questions arise: Why did U.S. President Donald Trump start the war against Iran in the first place? Is this the result of a lack of planning, or is there a larger strategy behind it? And even more importantly: Is the United States as a whole now suffering from systematic policy failures?

The first question is currently the subject of numerous analyses and will likely never be fully answered. However, the suspicion that the US is primarily concerned with gaining control over key oil reserves in the Gulf region is not implausible. The fact that, following Venezuela, another major supplier of raw materials and ally of China—Iran —has now been targeted gives pause for thought and points to a distinct geostrategic objective. According to this logic, the U.S. is attempting to cut China off from vital resources and thus slow its continued rise. Given the timing of the attack, tactical considerations—including Israel’s military advance in the region—likely served as the “trigger.”

The answer to the second question is therefore “both”: While the execution of the actual attack on Iran appears very short-sighted and ill-conceived, there could well be a geostrategic pattern with far-reaching goals behind it. 

This makes the answer to the third question particularly important: Is it possible that Donald Trump has completely underestimated the obvious—and long-known—risks of a war with Iran? Or did he—true to his nature—disregard existing risk analyses and well-founded concerns? Much evidence points to the latter assumption: Apparently, clear warnings from the responsible military planners were watered down until a “favorable” risk profile remained. The rapid success of the U.S. in Venezuela likely reinforced an overall risk-taking attitude. In contrast, clearly identifiable risks—including the Iranian regime’s willingness to escalate regionally and its use of the Strait of Hormuz as a lever—were apparently ignored. It appears that Trump’s military advisory staff was not permitted to present a truly balanced or even critically controversial risk analysis on the subject of Iran—instead, the “Commander in Chief” was predominantly given the positive answers he demanded.

The Autocratic MAGA Cult Leads to Systematic Policy Failures

This last point, which is confirmed by reputable sources, is of enormous importance. It points to a fundamental risk in current U.S. policy. Hasty and ill-conceived political initiatives (keyword: “Greenland”)—even going so far as to provoke a war in one of the world’s most economically sensitive regions—reveal a clear pattern: Under Donald Trump, the U.S. is now acutely suffering from a culture of systematic policy failures.

This problem is almost inevitable—it is found in every political regime strongly characterized by autocratic structures. Current examples include Russia under Vladimir Putin, and to a lesser extent China under Xi Jinping—as well as, more recently, the U.S.

The underlying principle is clear: the more decision-making authority—that is, political power—is concentrated in the hands of a “strongman” at the top, the less effective broader corrective and balancing mechanisms become. At the pinnacle of power, important information and expert opinions are often ignored or—as was recently the case in the U.S.—deliberately suppressed and often even politically ostracized.

Inevitably, in such systems, the ruler makes decisions based on incomplete, one-sided, or deliberately “embellished” information. Critical reflections and alternative scenarios are systematically suppressed or opportunistically ignored—always with the aim of pleasing the man at the top. Political leadership then degenerates into a mix of ignorance, arrogance, and serious information gaps (“blind spots”).

The result of this autocratic escalation is systematic policy errors—which can lead to serious misjudgments with often catastrophic consequences. An example of this is provided by Russian President Putin, who ordered the attack on Ukraine in 2022 based on one-sided information and unrealistic assumptions.

The Cost of Autocratic Complacency

With Donald Trump’s MAGA ideology, a culture of autocratic complacency now prevails in the United States as well. Loyal followers like U.S. Secretary of Defense Pete Hegseth promote an image of absolute infallibility—even in cases as complex as Iran. Reality, however, paints a different picture: Before the attack on Iran, crucial information and risk analyses were apparently ignored, as was a thorough consideration of the unpredictable consequences of war. The deliberate blockade of the Strait of Hormuz, as well as its ongoing threat from “asymmetric attacks,” should not have escaped the attention of a thorough military planner—as plausible risks—any more than Iran’s strategy to draw the entire Gulf region into the conflict. Part of the blame for this surely lies with the—often purely ideology-driven—downsizing of key departments and expert staff. The attack on an Iranian school building, too, was likely based on a reckless and hasty reliance on outdated data.

Both Hegseth and Trump now face a mess in the Gulf that risks pushing the U.S. into moral isolation—while at the same time imposing enormous risks on the global economy. Since the Iranian regime can hardly be “bombed away” with airstrikes alone, the U.S. faces a real problem. Trump’s seemingly helpless attempts—most recently even pressuring China and NATO for military support in the Gulf—highlight the deep dilemma.

Trump should know: Wars almost always end up costing more than expected, and they are always fought on the home front as well. His own voters are unlikely to be pleased that gasoline prices in the U.S. have recently risen significantly. Against the backdrop of high living costs and the approaching midterm elections, this is not a good starting point for the Trump administration (see Chart 3: Approval ratings for U.S. President Donald Trump).

Complex Challenges for Entrepreneurs and Professional Investors

So far, neither the future course nor the duration, let alone the final outcome, of the war in the Gulf is foreseeable. Iran’s intention is to extend the conflict both in terms of time and region in order to drive up oil prices in the long term—and thus also the economic costs for the entire world. Iran has been preparing for precisely this strategy for years and still appears to have effective methods and the necessary military arsenal at its disposal.

Should Iran’s strategy succeed, Donald Trump would likely be the first to push for a swift end to the war—or to strike a half-hearted “TACO deal” soon. For one thing is clear: the U.S. is under intense time pressure. For domestic political reasons alone, Trump will do everything in his power to avoid a scenario involving sustained Iranian attacks and persistently disrupted oil markets.

The Strait of Hormuz remains a critical chokepoint. As long as only a limited number of ships can pass through it, massive pressure is exerted on a multitude of global supply chains. Since the cost of marine insurance has also risen sharply—or is being denied altogether—the problem is spreading to large parts of the global trading system. This is precisely where the significance of maritime bottlenecks as dangerous, yet often severely underestimated, geo-economic pressure points (“global choke points”) becomes apparent.

At present, it is virtually impossible to make a meaningful forecast regarding the future course of oil prices and, consequently, the development of the global economy. Entrepreneurs and professional investors should nevertheless be warned: The situation in the Persian Gulf is likely to remain unclear even after hostilities end. Israel and the U.S. have awakened a scorpion that has little left to lose and may remain dangerous. This suggests—at least from today’s perspective—higher risk premiums on oil and gas in the longer term. Should global inflation expectations continue to rise, not least due to rising food prices, financial markets would face a difficult environment in the coming months. The best protection against these complex challenges currently lies in a very broadly diversified multi-asset portfolio that actively weights commodities and avoids high exposure to “long-duration assets.”

Dr. Heinz-Werner Rapp, founder and director of the FERI Cognitive Finance Institute, in The Market NZZ in March 2026.

The author has already published numerous analyses related to the subject of this article, including, in particular (available in German): “Global Choke Points – Maritime Engpässe als unterschätzter Risikofaktor für Weltwirtschaft und Geopolitik”.