Trump - A Man With No Plan on Iran

This multipolar world that Trump, Putin et al appear to be trying to create does not seem to be creating a safer and more predictable world - quite the opposite if we think of the situation with the on-going wars in Ukraine, Iran, et al.

On Iran, I guess, like many people, I am trying to understand what is going on, particularly the drivers, where it is going from here and what it means in terms of the bigger picture.

As a starting point, trying to understand why we go to this point, and the specific move by Trump, and Netanyahu to pull the trigger for the attacks on Iran on Saturday morning, obviously we can go back a long way to October 7, events before or after. But let’s just start at the negotiations which were ongoing last week, and why we saw a move from a situation where, according to the Omani foreign minister, a deal was within reach, that something changed to encourage Trump and Israel to pull the trigger and to launch seismic attacks - much larger than had been expected, killing Supreme Leader Khamenei and a large number of the top cadre of the Islamic Republic.

I guess here you have to look at the motivations of the main players to try and get to grips with this. And therein Israel and the Islamic Republic even Gulf states are quite easy to figure out, the unpredictable factor is Trump.

Israel - It is clear that since October 7 Netanyahu has been in a mission to remove all the main external threats to Israel. Israel has understood both the strength of its military technological lead over its adversaries, including Iran, Hezbollah, the Houthis, even Hamas in Gaza. October 7 provided the pretext, and Netanyahu saw a window provided by the weakness of the Biden presidency in its dying days, then of the opportunistic nature of the Trump presidency to seize its advantage and remove its arch enemies in Iran and elsewhere now. Netanyahu has been able to set the agenda, and lead the US to deliver on its objectives. I think it’s also important to understand Netanyahu’s personal agenda of using the war narrative to detract from his own legal problems at home - even to try and use the war to put those to bed.

Iran - for the Islamic Republic and it’s leadership it is about survival. Indeed, since its creation it has seen itself under almost constant attack from the US, Israel and its allies. It has built its defence on multiple layers of deterrence, including its nuclear programme, its ballistic missile programme and its proxies. But the Islamic Republic has been quite measured in how it goes up the escalation ladder, and has always been keen to calibrate carefully, and signal all this, to limit the escalation response from the US and Israel, to avoid giving them an excuse to ramp up attacks to the point that it becomes existential for Iran.

Iran did not escalate to attack Gulf states prior to the current round of US and Iranian strikes as it did not see these as existential yet, and saw better relations with the Gulf as offering it options for economic cooperation plus also it hoped they would help leverage their own negotiating position - the Gulf states, eager to preserve their own security would lobby for de-escalation from the US and Israel.

Iran had a nuclear programme, and could have gone early to develop a nuclear bomb, or missile - Steve Witkoff suggested that Iran had enough fissile material for eleven bombs. But it did not as it saw going to a nuclear bomb would have immediately brought on US and Israeli strikes.

Net-net Iran has been quite easy to read, but Israel has used this predictability to its advantage, calling its bluff, raising the stakes constantly knowing that at each level the Islamic Republic would fold, or not match it going thru the escalation gears, to mix metaphors.

Gulf states - its fair to say that a decade ago and Saudi Arabia would have been happy for the US to have taken out the threat from Iran. But with MBS things have changed. KSA has pushed an agenda of economic engagement with Iran, seeing this as the best way to ensure security for its own ambitious economic development agenda. Vision 2030, and similar visions across the Gulf for the likes of UAE, Oman, Qatar, et al are all based on security being assured to allow diversification away from energy to tourism and logistics. The Gulf states improved cooperation with Iran and were happy to lobby for peace terms between Iran and the US/Israel.

Trump - the game changer or disrupter. I guess in recent years, past US administrations have been happy to work with Gulf states to try and secure a negotiated settlement with Iran. Trump has turned all that upside down. And important here to think that unlike previous US leaders, and to some extent like Netanyahu, there is a Trump agenda separate from that of the US itself. Trump is all about himself, his own ego and interests. What has changed this year, and with this presidency as opposed to his first term - when he perhaps kept the neocons on Iran, like Bolton in check, is that Trump faces huge threats and risks at home. First there is the Epstein investigation which just will not go away and given his links to Epstein he must worry about some evidence of something emerging. Epstein is the smoking gun for Trump which just will not be extingushed. Trump seems desperate to change the news cycle. Then there is Trump’s lowly poll ratings - partly related to the Epstein saga but also polarising policies such as ICE, plus also the K shaped economic recovery. At present it looks like the GOP will lose both the House, but also possible the Senate, and as Speaker Johnson has said, that could mark the end of the Trump presidency, even another round of impeachment efforts - and likely there will be much more for his opponents to get their claws into second time around.

Simply put Trump thinks he cannot afford to lose the midterms. He is desperate for a big win, and that is why he is willing to take big risks - including in respect to Iran going against the very DNA of MAGA of no more foreign wars. You have a guy in Trump who wants to make his mark in history, is sociopathic in many respects, has an easily massaged ego, and I think Netanyahu (and Putin in that respect) have played to that ego time and time again. Netayanhu first in the 12 day way, softening Iran up and then offering Trump the icing on the cake of the opportunity to deploy bunker busting bombs to try and destroy Iran’s nuclear programme in Fordo et al. Trump could not resist, and I think we saw that again this time around. Trump likely was frustrated that the opportunity might have presented itself around the turn of the year with the big opposition demonstrations in Iran. The US could have deployed force then to turn the tide of the protests - and Trump egged the protesters on, promising to defend them. But in the event, in a strategic error, US forces were deployed thousands of miles away in the Caribbean in the other Trump vanity project to depose Maduro. The Islamic Republic called Trump’s bluff back then, but I think Trump did not forget that. This time around I think Netanyahu played to Trump’s ego, spun the yarn that Khamenei and a weight of the leadership of the Islamic Republic were meeting together and with a preemptive attack the leadership could be decapitated and this could then give the momentum again to the opposition to rise up to push thru regime change. The pitch likely to Trump was what’s the downside for you, you will be remembered as the president who took out Khamenei, revenge for the Tehran embassy siege, and the Beirut barracks and embassy bombs. And if other things move your way, that the regime might fall and deliver a truly historic change in Iran and then surely the votes for

Trump to win the midterms, and to give Trump a pass on Epstein (as extraordinary as that seems). And what’s the downside, Netanyahu will argue? What did Iran do in respect to Soleymania’s killing or Nasrullah, or even the June attacks on Frodo et al. It’s a free hit for Trump and Israel. Trump could not help himself.

But the above kind of failed to account that for the Islamic regime it’s all about survival and when Trump and Netanyahu et al begin to go on about regime change as the goal, the Islamic Republic believed them. And I think there was a fundamental miscalculation on the part of Trump and his team and Netanyahu that if you cut off the head of the

Islamic republic that the beast will die. It failed to grasp that there is a hard core, ideologically driven core support for the Islamic Republic of 15-20% perhaps, that will die for the regime, and still have the monopoly on weapons on the ground. And a governing and even religious ideology based on survival, of hunkering down, passing the baton to the next believer in line to carry in the Islamic Republic and the Shia movement on. Seeing the Islamic Republic faced an existential threat now, and that their prior policy of a calibrated response of going thru the gears of deterrence had failed spectacularly. Predictability was no longer a strength - learning there from Trump. So the new response was to do the unthinkable - to lash out at Gulf states, to close the straits of Hormuz, or announce the intention there. Signal perhaps next that going for a nuclear bomb is an ambition, or launching a new global terrorism campaign is part of the new deterrence strategy.

This is now a wounded regime, looking for new mechanisms of deterrence, and unpredictability and now doing the unthinkable is part of that.

What does this all mean?

First, much higher risks all around, as you have players who’s bars for action have been lowered substantially.

Second, the prior consensus that we see negotiations fail, then some limited US/Israeli kinetic action, a stage managed Iranian response, then a deal which could be sustainable to a year or so, or more, and we all go on to focusing on the next global crisis, no longer seems credible. Therein the attacks on the Gulf states has challenged their very business model - tourism, logistics and energy under the cover of cast iron security. Whatever deal may be reached the bar for Iran to escalate now via drone strikes in the Gulf has dropped dramatically - and Iran seems to have much more drone strike endurance than the Gulf states drone defence at this stage. Will tourists and trade want to use the Gulf states with a fundamental lack of clarity on the sustainability of any deal and what it means for the security of the Gulf? Clearly Israel is set on the destruction of the Islamic Republic, which means it will continue to want to mow the grass with regular attacks, whatever short term deal might be agreed, and has proven the case with the peace deal in Lebanon. If Israel, and the US perhaps, attacks Iran in six months, why would Iran not retaliate again by sending drones to attack

Gulf states? And this constant risk from persistent and much more unpredictable conflict will weigh on Gulf economies.

So in a way here the Gulf states need a defining solution - perhaps regime change in

Iran. They might be willing to support such an operation militarily, but have limited ability to put sufficient boots in the ground to be the game changer - and would Gulf Arabs want such a military adventure in Persian Iran?

Pressure will then likely now be increasingly put on the US, from Israel and the Gulf for this regime change scenario in Iran, which perhaps explains Trump’s mention this week of the possibility of limited US troops on the ground - previously ruled out by MAGA folks after the Iran and Afghanistan debacles.

But we have seen this so many times before, whether Vietnam, or Iraq or

Afghanistan of the US being incrementally dragged into a larger conflict. But in

Iran with an entrenched regime, regime change will be very hard. And at present there seems to be little understanding from the US of what regime change would look like. Notable there that Israel has been goading on Iranian Kurds to rise up against the Islamic Republic - much to the consternation of Turkiye but then risking a wider conflict, and then risking the Kurdish peace process in Turkiye, but then also peace in Syria and Lebanon.

I worry here also that with Trump’s poll ratings lagging still, and killing Khamenei not doing the trick that going deeper into a conflict in Iran might just offer a risk return profile to entice Trump. A major conflict in Iran might also just give Trump the pretext then to clamp down on democracy at home, and stall midterms, if he thinks he will lose these anyway.

Third, what we are seeing in Trump’s action in Iran, but earlier on Venezuela and Greenland is a man who is driven by ego, self and opportunity. This idea that there is some grand Trump strategy, the Donroe Doctrine, has surely been blown thru by Trump’s actions in Iran. Remember MAGA, no more external adventures, unless in US interest, it’s about securing the home continent, and building defences and the economy against China. And that was the explanation used for pulling back from Europe, and limiting arms supplies to Ukraine - the Elbridge Colby line of saving resources to counter China. So why now blow limited air defence weapons in a war in Iran with little immediate thrust directly to the US? It does not make sense unless viewed from Trump’s own decision set of ego, self and opportunity or of DTF: Donald Trump First.

But the above suggests that we should expect more unpredictable actions from Trump if this is all about turning his dismal poll ratings - yes, manipulating midterm elections to his advantage, but maybe more WAG the DOG military adventures elsewhere. This is a president who has a much lower risk tolerance in terms of his actions because the risks he faces at home simply outweighs the risks from actions like on

Iran now. And for Trump, and his mindset, someone else can always clear up the mess, there is always someone else to be blamed.

So we should expect the unexpected, the unthinkable from Trump in the months ahead.

Greenland invasion, why not?

Deal with Putin to screw Ukraine, also possible?

But also from Iran, the past policy of a highly calibrated response of going thru the escalation gears has failed. We should also not expect the unpredictable from Iran - anything is now possible.

And all could be globally systemic, in a world where Trump has weakened multilateral institutions to such an extent that I think they would struggle to coordinate a response to a GFC like event.

I mean the picture of Melanie Trump leading the UNSC on the day the Gulf was burning, what a vision but surely the vision that Trump wants to project as the UN as tootless while his Peace Board is the real decision making body.

Fourth, China the loser from higher oil prices?

Perhaps but surely China will be happy the US is likely stuck again in a long war in the Middle East, and rapidly depleting its air defence missile stock. Prime time to take Taiwan? Perhaps, and given that Trump has shown few cares about coming to Taiwan’s defence, but seeming to push a policy of might is right and great powers take what they can, maybe a green light to Xi.

Fifth, Russia winner from higher oil prices?

To an extent, but I doubt that Putin will be pleased to see the potential loss of another potential ally, Khamenei, coming after his loss of buddies such as Yanukovych, Gaddafi, Assad, and Maduro, and potentially Cuba in the offing. And given the vast technological superiority of US military kit shown in the on-going conflict, Putin will worry that he might be next? Enough for him to cut a deal over Ukraine early? Not yet. Putin will want to wait and see how the Iran war plays out and whether it still presents him with further advantage over Trump. Or that Trump’s position weakens so much in terms of midterms, and events in Iran through a failed regime change operation, that he will wait to bide his time yet.

Sixth, given the risks which are systemic in my mind I was amazed by the relatively benign initial market reaction on Monday.