A shaky ceasefire

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0:30Hey, Mark Filippino here. If you haven't heard yet, this is the last episode of Swamp Notes. Before I pass it over to my colleague, Sonia Hudson, to start the show, a few words. You know, when we first started thinking about this show about three years ago, we wanted to bring you smart analysis and reporting from the Washington Bureau at the FT, and I hope we did that. I hope you learned something, heard an interesting perspective, and that Swamp Notes has helped clear up the muddy world of American politics for you in some way. That political coverage, those reporters, me, we're not going away.

1:02We're going to keep up with the light speed pace of Washington on the FT News briefing. That also includes the Bethlehem Project, which we'll start dropping on the FT News briefing feed on weekends. There is a lot of news out there. We're going to stay on the stories you need to know. Thanks to everyone who made this show possible, and thank Thank you for listening.

1:50will agree to stop bombing for two weeks.

1:53Sonja Hutson: But that ceasefire is already showing cracks. Explosions in the Middle East threatening a fragile ceasefire. As tensions play out across the region, the key sticking point is now Lebanon. Iran's foreign minister says the ball is in Washington's court over whether or not the ceasefire deal holds. Now, the big question is, is this a lasting peace?

2:22Sonja Hutson: This is Swamp Notes, the weekly podcast from the Financial Times, where we talk about all of the things happening in U.S. politics, finance and the economy. I'm Sonia Hudson, and this week we're asking, what comes next in Iran? Here with me to discuss is James Politi. He's the FT's Washington Bureau chief. Hey, James. Hey, Sonia. So, James, tell me about these ceasefire negotiations. How did Iran and the U.S. arrive at this moment earlier this week? Well, it was a very quick pivot to negotiations. If we remember, as early as Tuesday morning, Donald Trump was threatening Iran with such aggressive military strikes at 8 p.m.

3:06that night that it threatened to wipe out the entire Iranian civilization. And then by the evening, they had struck a deal to implement this two-week ceasefire, which is fairly fragile. I think on both sides, there was a realization that some sort of de-escalation was in their interests. But whether that lasts, you know, really remains to be seen.

3:29Sonja Hutson: Yeah, I was really struck by how quickly it became so fragile, how quickly things started to unravel. Can you give us a few more details about where exactly the ceasefire stands now? Well, so the ceasefire has been in place since roughly Tuesday evening, and there have already been tensions on a number of fronts. One is whether it applies to Lebanon, where Israel has continued its attacks on Hezbollah. The Iranians believe that the ceasefire should include Lebanon. The U.S. has insisted it did not include Lebanon. There are also frictions over the Strait of Hormuz, this vital waterway for shipments of oil and gas.

4:12The Iranians are suggesting that they can continue to exert some control over it, including by assessing some tolls over vessels passing through the strait, whereas the U.S. is calling for passage through the strait without any kinds of limitations and said that they don't want to see any tolls, at least not for now. and actually very few vessels have passed through since the ceasefire has taken hold. So there's no progress on that front, which I think is important to the U.S.

4:43Sonja Hutson: Yeah, I mean, that was the basis of Trump's whole threat that led to the ceasefire was you need to open the Strait of Hormuz or I'm going to bomb you even more aggressively. So what does it mean for Trump and the ceasefire to have that critical point not actually be addressed? Well, I think it's one of the subjects that is going to come up in the next few days and is going to be a source of increasing frustration on the American side if it doesn't happen. There's talks scheduled in Pakistan over the weekend. If they happen as they have been scheduled to happen, then I'm sure that this is going to be one of the main flashpoints.

5:22The other source of tension is over Iran's stockpile and ability to enrich uranium. The U.S. kind of maintains that under the ceasefire, Iran should not be allowed to enrich uranium. And the Iranians believe that they still have some right to enrich uranium. So these are very hot button, critical issues and sources of tension between the countries that, you know, well predate the war that are still very live and kind of cast doubt on whether this ceasefire will turn into a lasting peace.

6:02Sonja Hutson: James, the other thing that's been interesting for me to watch is how the president has been bragging about winning this war for weeks. Why was the U.S. willing to negotiate then? Well, Trump was under tremendous pressure to de-escalate the conflict domestically, in particular, because the polling on the war has not been very good. His approval ratings have been dropping. Republicans have been growing increasingly antsy about their prospects in the midterm elections in November. Gas prices have been rising because the oil price globally has been soaring due to the war. And so there were a lot of points of pressure on the White House to roll this back and not escalate further.

6:50But of course, Trump also indicated that he doesn't want this whole war to end in a kind of strategic failure for the US. And so with Iran not surrendering immediately, as he had called for, and not capitulating under the weight of U.S. bombs, it was difficult for him to take this step. He took it after a wave of bluster that even raised the prospect that the U.S. might be willing to commit war crimes by attacking the civilian infrastructure in Iran in order to reach its goals and really force Iran's hand. But in the end, at least for now, Trump has chosen the path of a truce. It's worth noting that Trump has not withdrawn or proposed to withdraw any of the, you know, tens of thousands of troops that he has sent to the Middle East.

7:44He has indicated also that they are very much on standby and ready to pick up the war again if the ceasefire falters.

7:54Sonja Hutson: Well, let's talk a little bit about the negotiations moving forward. As you mentioned, both sides are set to meet in Pakistan this weekend. But I'm curious what you think will come of all that, especially given the fact that Iran's president has said these Israeli attacks on Lebanon will, quote, render negotiations meaningless. I mean, the U.S. and Trump, in a sign of, I suppose, seriousness about the negotiations, have decided that J.D. Vance would lead the delegation. On the U.S. side, he's the vice president and is known for being kind of skeptical about the Iran war. And so someone who might be more sympathetic to the idea of let's turn this ceasefire into a lasting peace and kind of put this to rest.

8:42And, you know, he'll be working alongside Steve Witkoff and Jared Kushner, who kind of led the previous negotiations before the war. There's a very kind of profound lack of trust between the U.S. and Iran, both in terms of the fact that negotiations before the U.S. strikes on nuclear facilities last June didn't go anywhere, and the fact that the negotiations before the war this year didn't go anywhere. So to overcome that lack of trust is going to be, I think, a very high hurdle. But there is an effort underway. And I think the question is, is this going to be real or is it just going to be a cover for kind of both sides to regroup ahead of the next round of hostilities?

9:34Sonja Hutson: We've talked a lot on the show about the end of multilateralism or the waning era of multilateralism under Trump's second administration. What does the ceasefire, the war in Iran, say about the state of that? Well, I think the multilateralism is, I think, very much dead in a way. And that has been exposed through this conflict. The UN has not played a very big role at all in trying to mediate this. Trump has been at odds with NATO allies and bashing them for not helping enough to try to keep the Strait of Hormuz open by providing escorts to vessels. He keeps complaining about that. So that phrase, I suppose, not like a multilateral institution, but the kind of a plurilateral alliance that normally the U.S.

10:27and European countries can count on to present a united front. There has been very little joint action by the G7 even, which traditionally would play a big role in any kind of armed conflict involving the U.S. So it's really been a kind of a reflection of the fact that this is a war of choice waged essentially unilaterally by the U.S. alongside Israel, but without any real backing or support from the European side or more globally. So it's a test really of whether the U.S. can successfully kind of go it alone. And it's not doesn't seem to be working out fantastically well.

11:09Sonja Hutson: Yeah. And one way that that has manifested is all of these economic shocks around the world. Is there any sense that the ceasefire could resolve some of that? I think the ceasefire would resolve quite a bit of that. I mean, already we've seen some recovery in the markets after the ceasefire was announced. It's certainly a far better alternative to what Trump appeared to be proposing in the run up to the ceasefire. So that should help to support both kind of financial markets broadly, but also bring down the oil price. The IMF and the World Bank are meeting next week for their spring meetings here in Washington.

11:47And I think the shock to the economy from the Iran war is going to be like the biggest source of concern and discussion. A ceasefire that holds will be very welcome, especially if it turns into an actual peace deal in the region. But of course, if this is just a break really in the war and it all kicks off in a couple of weeks again, then it's not much of a solace.

12:13Sonja Hutson: So there's this phrase that our very own Rob Armstrong coined, taco, Trump always chickens out. Is this an example of that? I mean, Trump posted that a civilization was going to be eliminated and then at the last minute struck some sort of fragile deal. How seriously should we have taken that threat? I think that threat, you know, needed to be taken seriously. I think in retrospect, it was maybe a sign of Trump's insecurity that he knew that unless he really threatened the most aggressive possible response, that he might not be able to draw the Iranians into a ceasefire. But having said that, I think the experience from Trump's second term has been that a lot of his threats do need to be taken seriously because he, on certain occasions, will actually carry them out.

13:07You don't know exactly what he's going to carry out and for how long and to what extent. But I don't think that anything he says can be completely dismissed out of hand.

13:17Sonja Hutson: What do you think the lessons learned are for Trump in this conflict so far? I think the lessons learned are, firstly, that it's very difficult to wage war without the support of the American public. And that's what he's doing now. And that puts him in quite a difficult position domestically because the war is unpopular. It's triggering some tensions, you know, even within his own coalition. It's making it harder for Republicans to maintain control of Congress in November. So I think waging a war without popular support is the first problem for Trump. And I think that internationally, I think he probably underestimated the resilience of the Iranian regime and kind of bought into theories that they would capitulate very quickly, very easily.

14:06They have not done so, even though the U.S. has hit many targets, killed the Ayatollah. And so now we're in a situation where Trump may be forced to wind down the war, leaving the regime in place to a certain extent, to remnants of the regime in place, and with perhaps greater control of the Strait of Hormuz and greater leverage over the global energy markets than they had before the war. So I think that perhaps this was a test of Trump's hubris that he failed. But of course, there's still more chapters to be written about how this all plays out. So things could change.

14:50Sonja Hutson: We've touched on this a little bit, but can you talk to me a little bit more about the political consequences of this war for Trump and the Republican Party? I mean, we've got midterm elections coming up in November. There are primaries going on right now. What does that look like? I think the most important thing on that front is just to go back to the 2024 campaign when Trump was his main message to the American public was that he would not launch any new wars. And he campaigned very strongly on that. And in particular, that he would not launch any new wars in the Middle East. So this is really, in some ways, a break from a very central campaign promise that's going to be very hard to explain.

15:34The other dimension of that is that it has had repercussions over on inflation and gas prices and affordability, which was actually the main plank of his 2024 campaign. And that has been in a way shattered as well, because gas prices have gone up. The battle against high inflation has not been vanquished. There are concerns that the Federal Reserve might not be able to continue to bring rates down. now because of the war. And that sort of economic boom that Trump had promised for 2026 has not really materialized. So I think this gives a big opening to the Democrats to attack Trump on all these fronts and has put Republicans clearly on the defensive.

16:22There's still a while to go before November. And again, things could change. But I think the political consequences have been pretty damaging, actually, for both the White House and Republicans so far.

16:33Sonja Hutson: All right, James Politi, the FT's Washington bureau chief. Thanks so much. Thanks, Sonia.

16:46Sonja Hutson: This was Swamp Notes, the U.S. politics show from the FT. If you want to sign up for the Swamp Notes newsletter, we've got a link to that in the show notes. Our show was produced by Henry Larson, and it was mixed by Sam Giovinco. Special thanks to Pierre Nicholson and all of you for listening to the show. I'm Sonia Hudson. Our executive producer is Topher Forges and the FT's global head of audio is Cheryl Brumley. Original music by Hannes Brown.

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