Trump can't Decide

Providing further evidence that our president is deranged, cult leader, convicted felon, and failed President Donald Trump "truthed" this morning, the following:

Iran has just informed us that they are in a “State of Collapse.” They want us to “Open the Hormuz Strait,” as soon as possible, as they try to figure out their leadership situation (Which I believe they will be able to do!). Thank you for your attention to this matter! President DONALD J. TRUMP

There is no chance that Iran told Trump that the country was in a "state of collapse." That is nonsensical chest-beating that is more likely to harm negotiations than anything else. What this really was, coming just one minute before trading opened on the New York Stock Exchange, was an attempt to calm financial markets after oil prices shot up overnight. West Texas Intermediate crude climbed back over $100 per barrel, and Brent crude was more than $112 before dropping slightly. Trump was careful not to mention that he has already rejected the Iranian offer.

Iranian negotiators had proposed via Pakistani interlocutors that the United States lift its blockade on the Strait of Hormuz in return for Iran ending its closure of the strait. For the time being, issues related to Iran's nuclear program would be set aside while other issues were resolved in negotiations. According to the New York Times, Trump was not satisfied with this proposal, though it was not clear why. The Times reported that "accepting it could appear to deny Mr. Trump a victory." This really gets to the heart of the matter and addresses a point about which I have previously written. Trump essentially has two options at this point: a humiliating agreement or escalation. An agreement with Iran would be humiliating because there is almost no chance that it would be better than former President Barack Obama's agreement that Trump tore up and most certainly would be worse. Nevertheless, Trump still harbors delusions of an agreement in which he appears to be victorious. That does not appear to be in the cards. Escalation is also unlikely to achieve Trump's goals and has several downsides. Formost is the likelihood of the further destruction of petroleum production facilities in Gulf Arab states. This has created a dilemma for Trump that is probably responsible for his constant swings between threats and conciliatory statements. However, Trump's inability to make up his mind is starting to be a problem itself.

While Trump tries to make up his mind about whether he should accept a deal with the Iranians or escalate the conflict, the Strait of Hormuz remains closed, and the world remains deprived of what was once 20% of the global oil production. The last pre-war shipment of Persian Gulf oil has now reached its destination, and physical shortages of petroleum are happening. We are now in the ninth week of a war that Trump once suggested would be resolved in less than four weeks and are well past the worst-case scenarios envisioned by many analysts. As Paul Krugman writes this morning:

So far, despite much higher oil prices, demand for oil has fallen by only a fraction of the loss of supply. Instead, the world economy is running by taking oil out of storage. Since there’s only so much oil in the tanks, this can’t go on. So if the Strait doesn’t reopen, prices will have to soar high enough — and inflict sufficient economic damage — to destroy another 11 or more million barrels a day of demand. That’s a lot.

The longer this war continues, or the longer Trump twiddles around unable to decide upon a course of action, the more the world risks global economic collapse. As demonstrated by the United Arab Emirates' recent request to access the U.S. Treasury for economic support, even wealthy countries are facing economic headwinds. As Gulf countries lose money from lost oil sales and have to drain their wallets to pay for recovery from the war, dominoes could start falling in the U.S.'s direction as well. Silicon Valley heavily depends on Gulf investment. If that investment dries up, which there are already signs of it doing, the entire house of cards built by artificial intelligence and cryptocurrency could come falling down. Trump may think that he can afford to wait out the Iranians. Other important stakeholders may not be so sure.

Independent journalist Marcy Wheeler, who blogs as Emptywheel, has raised the possibility that the decision might be taken out of Trump's hands. She writes:

That’s one of the reasons why it is increasingly possible that Trump doesn’t make the decision on how to end this. He’s old. JD Vance could find a way to oust him (the Tech bros are really unhappy with Trump’s war). Those who have leverage over him, including Gulf allies who’ve made huge “investments” with him and his family, force him to change course. Congress could rein him in for making a terrible deal.

Complicating things even more for Trump is that the Gulf Arab states are not united. This morning, the UAE announced that it is leaving OPEC and OPEC+. This may well herald the ultimate collapse of OPEC, and it could lead to increased volatility in oil prices. However, in the short term, it will probably make little difference. The UAE cannot reach its current OPEC production targets, and most of its oil is bottled up due to the closure of the Strait of Hormuz. So, why quit OPEC now? One possibility is that it was a Trump administration requirement in order to access U.S. Treasury funds. Trump has traditionally hated the existence of OPEC. But another possibility is that the UAE is demonstrating its displeasure with Saudi Arabia. The UAE, along with Israel, would like to continue the fighting against Iran. Saudi Arabia appears to be considerably more cautious.

The possibility of Congress acting is slim, though the War Powers Act could come into play now that the war has lasted longer than 60 days. But given Trump's hold on Republicans, he probably faces no real threat from Congress. A more intriguing idea raised by Emptywheel is the suggestion that Vice President and reply guy JD Vance might somehow oust Trump. The technicalities of such a move seem daunting, but Vance could quickly cut a deal with Iran and blame Trump for its deficiencies, saying that Trump got us into a losing situation. Vance is certainly Machiavellian enough to knife Trump if necessary. One of the first things I wrote about Vance was a warning to Trump not to ever let Vance near him with a sharp object.

However, I've since thought of an even more likely scenario. Because Vance is now supposed to be leading U.S. negotiations with Iran, Trump might authorize him to make a deal that would be humiliating for Trump. Once the deal is signed and delivered, Trump could denounce it and blame Vance for negotiating a bad deal and misleading Trump about it. In that manner, Trump could get a deal that, while being worse than Obama's agreement, still saves the global economy and he can distance himself from that deal at the same time. There are a number of variations of this theme that could come to pass. For instance, Vance could actually mislead Trump and agree to a deal that Trump is forced to accept. It is almost certain that Vance's Silicon Valley benefactors want this war wrapped up as soon as possible and Vance is probably willing to go along.

For the moment, Trump and Iran continue to be engaged in an economic game of chicken with both hoping the other blinks first. The Iranians appear to be more than happy to make a deal based on their terms, terms that would be humiliating for Trump. While Israel and the UAE want Trump to restart the fighting, that is unlikely to achieve Trump's goals either and would likely make things even worse. As a result, Trump can't decide what to do next. Given all that is at stake, it is not out of the question that, as Emptywheel suggested, the decision will be taken out of Trump's hands.