Why Donald Trump says the Iran ceasefire is over

0:02Michael Clarke:Sky News, the full story first.

0:12Michael Clarke:The US-Iran ceasefire is in tatters. And with it, any hope of a return to normality in the Strait of Hormuz. This is why.

0:25Michael Clarke:How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open, and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.

1:01Michael Clarke:It's all kicking off in the Strait of Hormuz. Now, we're going to get into the detail in just a second. But basically, three tankers were targeted by Iran. The US retaliated with a significant number of strikes on Iranian strategic targets. Iran decided to hit back again, this time at US military bases in the region. For those of you currently a bit confused, after all, wasn't there supposed to be a ceasefire in place? You certainly covered it on the podcast, Neil. Well, here's Donald Trump's assessment of that. To me, I think it's over. I don't want to deal with them anymore. They're scum. You know what scum is?

1:37They're scum. They're sick people. And if they had a nuclear weapon, they'd use it.

1:41Michael Clarke:The president at least chose an appropriate venue to announce that hostilities could resume. He's currently in Turkey for a NATO summit that was supposed to get the Americans back on side with their allies. Guess what? That's not exactly going to plan either. But forget the agro in Ankara for a moment, because the real question is whether either side still has the ability or the desire to stop this spiralling. Although President Trump says the ceasefire is over, I don't think they'll go back to all-out war, because the US will suffer more and more, as will the world economy. Professor Michael Clarke is Sky's defence analyst.

2:16Michael Clarke:Michael, great to see you again. We know that there has been a US strike, but what prompted it in the first place? Yeah, it was a three-stage thing, Neil. The Iranians attacked three ships in the Strait of Humas, and they were moving up along the Omani coast, this southern route, which the Americans recommend, and they are looking after this route with helicopters and air power and so on. And one ship was a Qatari gas LNG carrier. The second ship was a Saudi tanker, oil tanker. And there was a third ship, no specifications to what that was. And apparently there was some minor damage. But in all three cases, the ships were hit with projectiles.

2:52Whether they were missiles or drones has not yet been made clear.

2:54Michael Clarke:Why? Was this just the Iranians taking pot shots? Presumably not. It looks like it. It looks as if they were trying to hit these ships, which they say should not be taking the southern route. The argument here is between the Iranian, the northern route around Larrakh Island, I mean, north of the Strait of Hormuz, is the one that they say is the authorized route. And of course, they've got no right to authorize any route, but they're claiming the right to do it. And the Americans are saying they want people to take the southern route around the Imani coast where they've cleared it of any mines and they're looking after it.

3:22But when the Iranian sea ships using the American route, they say, well, that's unauthorized. They contact the ships and say, you shouldn't be there. You should come north. And the ships ignore it. So they take pot shots at them. That's what happened. I think it's the Iranians overplaying their hand because they're trying to enforce the idea that all ships have to take their route because they are trying to say that we have authority over the Strait of Humboldt. You can use it, but only under our authority. And that's not true legally. It's not true in any sense. but they're trying to make it true by taking pot shots.

3:53So then the Americans responded overnight with a series of targets on 60 different sites, which they say were missile sites, radar sites, anti-aircraft sites, in a range of places. The places that they've hit are Bandar Abbas, which is the big port for the Iranians, Qajim Island, which is that big island just opposite Bandar Abbas, Syriq, and the whole area of Syriq a bit further to the south, and even explosions reported in Bashir, which is where the nuclear reactor is, the civilian reactor, just explosions reported. But the Americans say, look, we hit a series of sites, quite heavy hits, the heaviest since the ceasefire, in order to make the point to the Iranians that there will be consequences if they take potshots at ships in the Gulf.

4:35That was the second stage. Then the third stage, the Iranians then hit back with attacks on American bases or the American bases in Kuwait and in Bahrain, where the Fifth Fleet is headquartered. So that's where we are now. Three sets of attacks. Iranians attacking ships, Americans responding with attacks on facilities in Iran, the Iranians re-responding with attacks in the Gulf on American bases in Kuwait and Bahrain.

4:59Michael Clarke:I mean, the US strikes on Iran, the targets that they have selected, what do we learn from that? Was this just pure out-and-out retaliation? Was there a broader strategic purpose? It is retaliation. The Americans wanted to hit them hard, and they say that they've hit the things that matter to the Iranian military. They're not hitting oil facilities, as far as we know. They've gone for air defence sites, radars, where they say there are missiles and launch points. I mean, this has come from CENTCOM, Central Command. They're a serious organisation, so I'll tend to believe what they say. And so they picked out about 60 sites which matter to the Iranian military.

5:35So in one sense, it's a heavy hit, it's a heavy retaliation, but it's not the all-out resumption of hostilities. They're trying to indicate that if you take pot-shot ships in the Gulf, in the Strait of Hormuz, you will pay a price. And the price is not huge, but it's higher than you would want to bear.

5:52Michael Clarke:Let's try and apply the same kind of thought process to what Iran did. In retaliation, were the symbolic targets that they picked out, operational targets, purely military ones? What signal was Iran trying to say? The Iranian signal is that we'll do more of the same. We'll attack American bases in the Gulf. And this was the air base in Kuwait and the naval base in Bahrain, Al Jafir, which is also an interesting naval base for the Brits. We're there as well. And that base has taken a lot of damage over the course of this war. The Americans don't talk about it very much, but the Al Jafir naval base has been quite severely damaged.

6:24Now, what the Iranians are doing is they say, look, we're going after American facilities. But the fact that this is in Gulf Territory, we don't care. It's your fault, Kuwait. It's your fault, Bahrain, for hosting American facilities. And the message the Iranians are sending is, if you push us too far, we'll go back to attacking the allies across the Gulf. We'll go back to a regional war, which is when this war was at its peak in early April. And that's what the Iranians, in a sense, are threatening. So we'll see what the Americans do in response to that.

6:56Michael Clarke:The Gulf states, and in particular, of course, those that have just been struck, must be at their wits end, caught in the middle. But we're not about to see that they don't want US military bases on their territory any time soon. They know that they need the United States. But equally, they now know that the U.S. can't protect them completely. And in this case, the U.S. has gotten dragged into a war that was not of their choosing. They advised against any military action before it started. And then they were ignored, as were the European allies. And now they feel that they're in the middle of it.

7:25So they're very angry with both sides. They're furious with the Iranians for attacking them, attacking bases in their territory. But they're pretty furious with the Americans for doing it at all. It undermines their reputation for stability and prosperity. It's a line they want to try to get back to, and they really want this ceasefire to work. And if the ceasefire breaks down because both the United States and Iran overplay their hand, which is always the danger, they're the ones who will suffer.

7:52Michael Clarke:I'm just completely in the dark as to how the ceasefire can work when it appears that both the United States and Iran have fundamentally different views of what that MOU, Memorandum of Understanding, actually means. Iran is acting like they control the Strait of Hormuz. They do, to an extent. That's right, they do. And they know that they can close the Strait of Hormuz very quickly just by threatening ships. Even if they say that they're closed, they're probably closed. And if they launch an attack on just one ship, whether it hits it or not, then traffic will stop. I think we'll find that there's nothing gone through the straits since these attacks.

8:25I'd be surprised if anything has, anything big anyway.

8:28Michael Clarke:But wasn't the whole point? Wasn't the whole point of the MOU to stop this sort of thing happening? The MOU, of course, it wasn't a peace deal. It was an agreement to talk about a deal. And it said there will be an immediate ceasefire. And it wasn't clear quite how that ceasefire would work. It said the Strait of Hormuz would open. And the Iranians say, they say, well, it is open as long as you use our authorised route. And the Americans say, you've got no right to authorise a route. They ought to be open the way they were open before the war started. So they both have different interpretations of what the Strait of Hormuz shall be open, what it means.

8:58Is that a failure of drafting when it came to the MOU? Well, an MOU that's more carefully drafted, it's drafted less hastily than this one was, and drafted by professionals, which this one wasn't. When you let amateurs get at it, and they're driven by President Trump wanting everything to happen instantly, then that's what you get. You get these sort of leaky, badly drafted arrangements that nobody agrees on what they really mean. There is absolutely no trust whatsoever between Iran and the United States. And this morning, President Trump has gone from saying that I can deal with these people in Iran now, this new IRGC, they're more pragmatic.

9:34They're more sensible. This morning, he said they're scum. That's the word he used. He said they're scum. So there's no trust there. And they don't trust the US because twice now, they've been attacked by the US and Israel in the middle of negotiations. So they say, just because you're negotiating with America doesn't mean to say they won't attack you out of the blue. They've done it twice before. So neither side trusts the other. And therefore, the ambiguities that are written into these badly drafted MOUs become serious. They don't have to become serious, but they do in this case, because there's nobody with real professional competence pushing the whole thing forward.

10:06Michael Clarke:And obviously, when it comes to broad, grandiose concepts like right and wrong, they all become a little bit fuzzy when we're talking in terms of geopolitics. But on the basis of what we know, who's in the right here? I mean, did Iran break the ceasefire by attacking the commercial shipping? Did the United States break the ceasefire by... By retaliating. Yeah, exactly. The Iranians started it. The Americans responded very strongly. The Iranians are responding now quite strongly to the Americans. So we'll see where it goes in the next 24 hours. I suspect, I can't guarantee it, but I suspect that this will calm down again because neither side really wants to go back to all-out attacks for all sorts of reasons.

10:44Michael Clarke:I'm certainly not doubting that. But you mentioned some of the things that Donald Trump has been saying at the NATO summit. On top of calling them scum, he has also said, the ceasefire is gone. Are we just back to where we were a few weeks ago? We could be. I mean, they've still got stuff in the area. They've still got the two carrier battle groups, and they've still got the Tripoli there, which is the Marine Expeditionary Unit. So they've got some big ships. They've got about 30-odd ships. They've got about 17 destroyers still on site. The US could go back to the policy of early April of all-out assault on Iranian facilities and on infrastructure in Iran and on any military facilities they could find.

11:18And they could threaten to land troops on, you know, Keshem Island or on Khag Island, as they were doing before. I don't think they will, because it didn't achieve it the last time. And the current real hardliners in the IGC are now in total control. So they won't budge if the Americans do go back to major attacks, and they will go back to attacking the region as a whole, which they don't want to do, but they certainly will if they feel that that's their only strategy. And the Strait of Omos will completely close again until there is some new arrangement. Although President Trump says the ceasefire is over, I think any further US actions will be graduated to keep a sense of escalation dominance, as they say, to try to grab the agenda back.

11:58But I don't think they'll go back to all-out war because the US will suffer more and more, as will the world economy, and we're that much nearer to the midterm elections, which really bother Republican candidates.

12:15Michael Clarke:How does a banana trigger a CIA-backed coup? Do AirPods herald the arrival of a new global order? What do LED lights say about the future of humanity? I'm Ed Conway, and in each episode of my new podcast, Stuff Matters, I take an object, crack it open, and reveal the world-shaping forces hidden inside. This is economics told through the things we think we understand. Search Stuff Matters on your podcast app to listen and follow.

12:53Michael Clarke:Am I wrong in suspecting the timing of the strike on the oil tankers might not be entirely coincidental? I mean, what's going on in Iran right now? The days-long funeral of the Ayatollah killed in the US air strike. Yeah, he was killed on the 28th of February in the early strikes. The funeral finishes in Mashhad tomorrow up in the northeast of Iran, which is his birthplace. The view that the Iranians take is that this is their celebration. This is their show of power. But what is interesting, Neil, is that while people have been paying their respects in various places to the coffin, the politicians in Iran have been getting a lot of abuse from the hardliners.

13:30They're saying, you shouldn't talk to the Americans at all. Why are you doing this deal with the Americans? They are the great Satan. Don't touch them. And people like Mahdhahidi, who is the leader of the IRGC now, the military leader, he's now reappeared. And he seems to be leading a push against doing anything with the Americans. So the Iranians themselves, the present government, are under some pressure from their ultra hard liners to actually break the ceasefire. So who's running around right now? If I had to say, it's a battle between Wahidi, who's the ultimate hardliner, and Galibaf, who's the Speaker of the Parliament.

14:04We don't know, but I mean, it looks as if it's something between those two. And Mojtaba, who is still not a peer, people thought he would appear at some point. Oh, the new Ayatollah, yeah. He might just appear at Mashhad in the final resting place. He might just appear then, but he hasn't so far. And that's been disappointing to quite a lot of people.

14:23Michael Clarke:So what hope for a set of negotiations between the United States and Iran when the people conducting the negotiations are the politicians who seem quite in favour of getting something done so they can get sanctions lifted and money going through the economy, when all the rest of the time you've got the IRGC taking to the streets, launching rallies, corralling public will. You can't have a negotiating process that ends successfully with that in place, can you? Not easily. I think what will happen is that another round of negotiation will begin, which will be just as shaky as this one. That's all I think.

14:54I think we'll be in for an uptick of military activity, probably not that big a one. It might be all over by this time next week. I'm not sure. But I think after that, there'll be another shaky round of ceasefire talks. But remember, this is all about doing something about the Strait of Hummus, which wasn't a problem before the war. Talking about the nuclear issue, which is what the war was supposed to be fundamentally about, has gone by the board. Ultimately, they will start talking again on nuclear issues. But so far, it's all in abeyance. So the whole thing has taken on a life of its own, which is to do with who is going to control the Strait of Hummus in the future.

15:29Michael Clarke:And all of this, whilst, as mentioned, NATO meeting in Ankara and Turkey, where at least they are supporting these latest US strikes with words, if not deeds. I think they feel as if they have to say that the US has a right to retaliate if the Iranians are playing games in the Strait of Hormuz, which should be open and go back to the way it was. They're damned if they do and they're damned if they don't in Ankara. And so in a way, they have to, and they logically would with Donald Trump sitting there, They have to offer support, at least in principle, for the fact that the Americans are trying to get back to the Strait of Hummus as was.

16:04They're trying to get the situation back to where it was before the end of February. What are the chances of that, though, Michael? I mean, we said on Sky, I mean, when the MOU was first published, we said the Strait of Hummus will open and close and open and close because it's a pressure point which the Iranians can use. They know and we know how easy it is to close the Strait of Hummus. the technology exists with cheap ballistic missiles, cheap drones, and the ability to employ lots of drones together. The fact is that the Iranians have demonstrated, as I say, to themselves as well as to us, that they can close the Stratiform Wars on any day of the week they choose, just by making it dangerous to pass through that 20-mile narrow piece of water.

16:45It's really important, 130 ships a day go backwards and forwards. All you've got to do is make it dangerous. And the Strait of Hormuz will never go back to the way it was before the war.

16:55Michael Clarke:So is the one thing that has come from the United States war with Iran is that Iran now recognizes it can be a lot more belligerent than it has been in the past and get away with it? Yes. As far as the Strait of Hormuz is concerned, that's true. And as long as this government is in power in Iran, that's what will happen. If there is an Iranian revolution, which at some point in the future, I'm convinced there will be, because the vast majority of people in Iran hate their government. I mean, 90 million people. How many support the government? 10 million, 20 million at the very outside. The rest of them hate it.

17:28They loathe them to test them.

17:29Michael Clarke:But if they're the ones with the guns. Yes, exactly. So when the revolution comes, it will be a very violent revolution. It'll be violent and nasty. It won't happen soon, but it will happen. If there is a different secularist government in Iran, then it's possible that we might get a resumption of the straits as was. But I'm not going to hold my breath on that. And that might be, you know, 10 or 20 years into the future. And that has implications for other straits in the world, the Malacca Straits, the Bosphorus, of course, there are charges on the Bosphorus. If you don't go to a Turkish port, you have to pay service charges.

18:05But there are other straits in the world that really matter. And the Taiwan Strait, I mean, in the South China Sea, you know, lots of straits in the world will now be more restricted, probably, because of what has happened in the strait informers. Michael, always a pleasure.