Donald Trump at the start of his second term (pic: rawpixel)
There is much speculation about what John Ratcliffe, the director of the US Central Intelligence Agency (CIA), was up to when he visited Moscow last week to meet his Russian counterparts.
Without doubt it had something to do with the common problem that both Donald Trump and Vladimir Putin face. Both started wars—respectively with Iran and Ukraine—in the expectation of rapid victory. Both are now bogged down.
Indeed, the war on Iran seems to be hotting up, with the first exchanges of fire between the two sides for several weeks. This may seem surprising, given that last week the Trump administration sought to reframe the conflict with Iran.
Treasury secretary Scott Bessent announced an “economic D-Day—the single greatest financial offensive ever marshalled against an adversary”.
Bessent threatened sanctions against Iran’s trading partners. But very little has actually moved yet. Only two branches of Egypt’s Banque Misr in the United Arab Emirates have so far been hit with sanctions.
Bessent said he is moving slowly. “Why would I want to blow up the global financial system?” he asked. He’s already been fiddling around with that system, which is in a delicate state.
The Financial Times newspaper reported last weekend that the yields—interest rates—on Western government bonds have risen by tens of billions of dollars since the US and Israel attacked Iran on 28 February.
Bessent has been trying various ineffectual wheezes to halt the rise in US treasury bond yields.
But the big problem with trying to isolate Iran economically is China, which imports 90 percent of Iran’s oil. China warned that it would retaliate if its companies were hit by these new sanctions.
This isn’t just talk. China controls the bulk of the rare earth minerals on which the global economy depends.
It’s already cut the supply off to the US once to discipline Trump.
The US is running a two-track campaign against Iran. Alongside economic sanctions, the Pentagon has been working to reopen the Strait of Hormuz, using various techniques to help tankers evade Iranian efforts to block them.
This has had some success, although experts disagree on how much oil is currently getting through.
One US operation has been to try to sweep the strait of Iranian mines. So it’s significant that, according to US central command, the latest strikes were aimed at Iranian efforts to lay more mines.
These clashes may well escalate. Control of the Strait of Hormuz is a key objective of the Iranian regime.
Timing is a big issue in both sides’ calculations. The Iranians may decide it would be more effective to escalate closer to the US midterm elections, in November.
According to leading critic of US foreign policy Trita Parsi, “Iranian officials say, both publicly and privately, that they expect the US and Israel to resume the war after the midterms regardless of the impact of the D-Day sanctions. Regional diplomats have largely reached the same conclusion.”
Meanwhile, the Washington Post newspaper reports that, in mid-August, top US commanders warned secretary of war Pete Hegseth against extending the war on Iran.
They say that munition stockpiles are too depleted to sustain a prolonged conflict. Troops and ships have been worn down by lengthy deployments and the focus on Iran is making the US more vulnerable to China and Russia.
It would be little wonder then if Trump sent Ratcliffe to Moscow to seek an end to the war on Ukraine.
Andy Burnham’s recent visit to Kiev underlined that Britain and the European Union are now taking the main role in sustaining Ukraine in the West’s proxy war with Russia.
Indeed, as the critical economist Branko Milanovic puts it, “The thirst for war has become almost insatiable in several European countries, principally in the Nordic and Baltic countries, but more recently also in Germany and in Britain.”
Trump could shut this down in a moment if he wanted to. His problem is getting Putin to play.
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