Why is Trump risking a 'forever war' with Iran?

0:00How 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. Sky News, the full story first.

0:59defence analyst Professor Michael Clarke to discuss Donald Trump's claim that the US will act as some sort of guardian angel for the Strait of Hormuz, but also that he wanted to charge a 20 % toll for the privilege. As you will hear, Michael is a very sage man because he insisted there was no way the plan could possibly work. And he was right, because just hours later, Trump had backtracked and he withdrew his threat to impose those tolls. He does insist the Strait has reopened, But with the missiles still flying and more tankers targeted, does peace have any chance at all? Here's my conversation with Michael Clarke, recorded just a little earlier.

1:36Michael, I mean, we've heard many things from Donald Trump over the past few weeks. The latest, we're going to keep the strait and probably own it. What is Donald Trump proposing, do we think? If he thinks that he can keep the strait open by military means, then he's got two carrier battle groups in the area. He's got a marine expeditionary unit. He's got landing ships. he could sail into the Straits and fight a battle of the Strait of Hormuz. And if they fight that battle, they will undoubtedly win it. But in winning it, there'll be some losses. They'd take some hits. Maybe it would result in the deaths or injuries of American personnel.

2:11So he could do that, but he won't. For the reasons I've just said, they won't take losses. And he knows that that would be deeply unpopular in the United States. So when he says we'll be guardians of the Strait, It's not clear what he means. I've no idea what he means. And when he says he's going to charge people 20 % of the value of their cargo, that is even more ridiculous. I'm fairly confident in saying neither of those things will happen. They will not take control of the strait, even though they might have a bit more military presence there. And they will not get away with charging 20 % cargo value for ships going through the straits who will still not be safe, whatever the Americans do.

2:46I thought no country is allowed to charge tolls or fees on an international waterway. And the reason I believe that is because that's what Marco Rubio, his Secretary of State, his foreign secretary, said just a few weeks ago. So this is just what, posturing? Sabre rattling? To be honest, I mean, I wonder that President Trump has got enough feet to shoot himself in. I mean, if that man was a centipede, he'd be running out of feet by now. It's completely ridiculous. And I think he just made it up. I mean, I'm sure he didn't talk to anyone who knows what they're talking about. I mean, the White House doesn't speak to anyone who knows what they're talking about these days because they're all in the deeper reaches of the State Department and the Pentagon.

3:20And you're absolutely right. The charging of tolls in international waterways is completely illegal unless it is governed by treaty, as it is in the case of the Bosphorus. The 1936 Monterey Convention allows Turkey to charge some charges because Turkey actually has to provide very specific arrangements because the Bosphorus and the Dardanelles is such a difficult waterway. Because when I think of being charged for a particular shipping route, I think of things like the Suez Canal, the Panama Canal. And there, you know, every ship that passes through pays a fee. How is that different? It's different because somebody has to build the canal.

3:52Canal is not a natural waterway. It's something that's been created. And that waterway, therefore, has to be maintained, has to be built, has to be put in, has to be maintained. That's perfectly reasonable and everyone accepts that. But all the great straits in the world, the Molucca Straits, the Strait of Gibraltar, the Dover Straits, the Bab el-Mandeb Strait, the foot of the Red Sea, and the Hormuz Strait are natural waterways. And where is this natural waterway? It's quite narrow, like the channel, 21 miles at its narrowest point. But it belongs to the world. And it is illegal in international law to charge to go through it.

4:23The International Maritime Organization is completely against charges. All the Gulf states who depend on it, the Strait of Hormuz, are completely against charges. The United Nations is completely against charges. And as you said, Marco Rubio a few weeks ago was completely against charges, which is why I think Donald Trump, you know, who's thrashing around to find some way of changing the dialogue because he's losing this war quite badly now. I mean, he lost the war on the 7th of April when the Americans, as it were, decided that they had to pause military operations and they went for a ceasefire on the 8th of April because the military got them as far as it was ever going to get them.

4:58They could keep hitting Iran and it didn't make any difference. And that was the point at which they lost the war. So what we're looking at now is the United States trying to manoeuvre to minimise the strength of that loss. But all independent analysts, even in the States, are saying this, that we've lost this war. And Donald Trump is trying to change the dialogue, change the narrative to somehow get something out of it. But he's doing so by expanding the scope of what it is the Americans are currently doing. The strikes on Iran, those continue. He's talking about charging a toll on ships going through.

5:29But he's also talking about a blockade of Iranian ports yet again. Now, let's just assume for a second that this is not all bluff and bluster. Can the Americans, do they have the capacity to be the guardian of the strait, charge the toll whilst maintaining the blockade and continuing strikes on Iran? Well, those three things, yes, they can blockade Iranian ports because they can see what ships are coming backwards and forwards. They can make sure that no ships either go into or come out of Iranian ports and get through the straits. So they can do that. But can they keep the straits open only if they fight for them in ways that I've talked about, and they won't do that?

6:06And if they don't keep the straits open, if they can't guarantee the straits open, they can't charge people 20 % of their cargo. What it will do is this claim of 20 % of their cargo. First of all, it would add to world inflation. It would put about$16 a barrel on oil coming out of the Gulf, which is already quite expensive. And that's about a fifth of all the oil coming out of the world. I mean, the way to think of it is there's about 100 million barrels of oil a day traded. 20 million barrels of that is through the Gulf. So all of that goes up, all that 20 million goes up by at least$16 a barrel.

6:38So that filters through to other oil prices. So again, charging this tariff will just depress world trade. And it will mean that people would avoid going into the Gulf. They just won't pay it. So I'm fairly sure it's not going to happen. Even just the practicalities of ensuring safe passage through this part of the world, when you've got a belligerent Iranian Revolutionary Guard Corps, you know, taking potshots at tankers right now. I mean, what are we talking about? Individual escort? Yes. And they've done a little bit of that. They've got these Arleigh Burke destroyers. They've got about 17 destroyers, very powerful air defence destroyers.

7:10And they've been running them up and down the Omani coast to provide air defence. But even that has not been good enough. And the two tankers that were hit in the last 12 hours are Emirati tankers, very important. They're VLCCs, very large crewed carriers. And these tankers, I think, must have had their transponders off. And they've been going regularly up and down with American escorts, both air and sea. And they've been doing ship-to-ship transfers outside the Gulf, which is the way the Americans and the Emiratis have been trying to get some of their oil to world markets. So fair enough. That's what they wanted to do.

7:40But the Iranians have found a way of locating these tankers, and they've sent cruise missiles against them, which begun serious fires on both ships. And that shows that even as part of an American strategy to sneak tankers in and out of the Gulf to do ship-to-ship transfers, they can't keep them safe. So the Americans can provide some guarantees, but to the ship owners and the tanker crews, if the Americans say you will be safe, will they believe them? No, because palpably the Iranians are still capable of hitting tankers, even with American protection. I mean, talk about having a thick skin. I mean, Donald Trump must have the hide of a rhinoceros on the day that he says, we will be the saviors of the strait, the guardians of the strait.

8:23Guardians of the strait. There's a movie in there somewhere. You know, the Iranians point out very directly that that's nonsense. They can't do it. The Iranians keep showing with all these weapons they are supposed not to have, that they can make the straits dangerous. They don't have to close the straits as such. They simply have to make them dangerous and ships won't go through. And that's where we are now. What ships are going through, it's a fraction. It's normally 130 odd a day. It's now sort of 10, 15, 20 a day on a good day at the moment. And they're all going through the Iranian route.

8:52They're going the northern route, the ones that the Iranians say you're allowed to use with our approval around Larak Island or near Larak Island. And the southern route, the American route, the ones that the Americans say is safe, hugging the coast of Oman, around the Musandam Peninsula, on the other side of the strait, the southern side of the strait, the Iranians are able to keep that dangerous. And therefore, physically, the Iranians are more in control of the straits than the Americans. And the only way that Americans can change that is to sail in there and fight for it. And they won't.

9:31How 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.

10:10Are there any lessons from history here? My mind goes back to the Iran-Iraq War of the 80s, and we had a really similar situation ongoing back then, didn't we? Yeah, both Iran and Iraq, between 1980 and 1988, tried to close the whole Gulf. It wasn't just the Straits. they tried to prevent shipping coming in and out of the Gulf, and they both tried to do it for their own reasons. And the result then was that ships from various nations acted as convoy escorts, so ships were taken through. But then closing the Gulf in general was only a matter of mind. In those days, it was actually very difficult to close the Gulf as a whole because it's, you know, it's 500, 600 miles of waterway.

10:49But now you can close the Gulf as a whole because of modern technologies because of drones, cruise missiles, which nobody had in those days other than the United States and Russia, and ballistic missiles. Again, in those days, ballistic missiles were only the intercontinental missiles, you know, the nuclear war missiles. But now ballistic missiles with shorter ranges can be produced relatively cheaply. So drones, cruise missiles, ballistic missiles are more useful to any power trying to close the straits than aircraft or mines, even though aircraft and mines can play a role as well. So we've had three nights now of US strikes on Iran and Iranian assets.

11:26I mean, has that had any discernible effect on the passage of ships through the Strait of Hormuz? It doesn't seem so. No. What the Americans are trying to do is to hit the Iranians hard enough across the southern coast and now going inland as well in some raids to deter them, to actually shock them into behaving themselves in terms of ships. Well, they're not doing enough then, are they? It's not working. No, it's not working. And the Iranians, for all that their economy is on its knees and they don't have great prospects for the future, they still calculate that they can last longer than the United States.

11:59And this hardline leadership almost certainly can. They don't particularly care what is happening inside their country. That's an argument for another day, suppressing the population of Iran. Their current argument is to prevail against the United States. And they believe they're winning. They've got a new regional identity beginning to develop with the Houthis in Yemen, taking some influence in southern Iraq, creating a new relationship with some of the Gulf states who have to learn to live with them and so on. So they're thinking differently about their future, but they certainly think they've got a future.

12:29See, I'm beginning to wonder whether or not actually it's Iran's own actions that are starting to cause it more problems than the US airstrikes, the blocking and so on. Two examples of that. They struck a Qatari tanker at the weekend. Now, Qatar has remained above the fray in their role as negotiator. We've also seen, you know, the Indian government summoning in the Iranian ambassador because of the death of one of their citizens. And we know that India, I'm not saying they've been the best of friends to Iran in the world, but they've certainly not been their biggest enemy. No, they haven't. And you're absolutely right, Neil, that the Iranians, as always, are overplaying their hand because, you know, they don't just want victory over the Americans.

13:04They want humiliation. They want vengeance. They talk about vengeance and revenge all the time. And they're overplaying their hand tactically with a lot of their regional allies and countries that matter to them in the region. They're overplaying their hand in the Strait of Hormuz as well because there's a massive push on now to not depend on the Strait of Hormuz so much. So DB World, this big Emirati company that runs ports, they've got big plans now to expand Fujara, which is an Emirati port on the other side of the Strait of Hormuz. That will expand. There are pipelines being developed that will go north.

13:37Yanbu on the Red Sea coast, the Saudis have got a pipeline to Yanbu, and Yanbu will expand terrifically. Now, obviously, they're still on the Red Sea, but they can get out through the Suez Canal in the north or the Babamandad Straits in the south. Everyone is now looking at ways of lessening their dependence on the Gulf and the Strait of Hormuz. So I think in five to eight years, the Iranians will find that they don't have the same sort of hold over the world economy that they feel they've got now because the Strait of Hormuz will have been downgraded in everyone's planning. And the irony there is, of course, that whilst others are taking their eyes away from the Gulf and looking for alternatives, Donald Trump appears to be doubling down.

14:13I mean, the mission creep here is enormous. I've heard a number of commentators suggesting this could be the start of a protracted, decades-long involvement in the region. Yes. Which is not what he wants. Yes. Part of his appeal to the American public in 2016 and then again in 2024 was an end to forever wars. We're not going to have any more forever wars. And this is looking like another forever war unless he's prepared to simply declare victory and leave, which is what we've always thought he will do. He will declare some sort of victory, but he'll keep forces there who will keep on, as it were, niggling, grumbling war with the Iranians, while the rest of the world comes to some sort of accommodation with paying tolls to get through the straitiforms illegally, but they'll do it in order to get their stuff backwards and forwards.

15:02And the American political position will keep retreating whilst occasional strikes take place. Is it the case though, I mean, we talked about April the 7th as being a key date already in this podcast. I mean, Was it the case that if there was an opportunity for Donald Trump to militarily take out Iran, that opportunity has come and gone? That's what we said at the time. That was the night. That's why I say it was the night of the 7th of April. That was the night he said, a great civilization will come to an end tonight. He said, we're going to bomb the power stations and the bridges and the infrastructure of Iran.

15:34We're going to destroy Iranian civilization. It didn't seem to occur to him that he was admitting a massive war crime if he carried that through. I'm sure the thought never occurred. But the world was shocked that that was what he was going to do. The Republican Party was shocked, not only because it would have been a gross thing to do, but because it probably wouldn't have worked either. So he, in a sense, frightened himself by where he found himself on the 7th of April. And the Iranians, too, because they said, if that happens, we'll make war on the whole region, just indiscriminately, more or less.

16:03And they were shocked. So both sides frightened themselves on the night of the 7th of April. But out of that fear, that was when the Americans lost because they've only got the military power to offer. There's nothing else they can offer. And the military power got as far as it was going to get. And since then, they've been trying to negotiate a political route to what they want. And there isn't a political route other than finding some silver lining to the fact that they've lost the war. This is going to sound like a daft question, but why is it important for global leaders, particularly of superpowers, to be consistent in their positions when it comes to events such as we're seeing in the straightforward news?

16:43It's not a daft question at all. It's important for leaders to be consistent because that's more likely to make them successful. And what Donald Trump's defenders say and some of his supporters say is, look, you know, he's different to everyone else. This is his tactic. He's unpredictable. And he knows that. And he uses that. And you're too outraged by what he says to understand the underlying logic to this. And there's some truth in that. His unpredictability works in some cases. It works within some parts of American politics domestically. It works in some respects in relation to the European allies.

17:13It works in relation to some of his new friends in Latin America. But it absolutely doesn't work in relation to Ukraine or in relation to Gaza and particularly in relation to Iran. I mean, he does it instinctively and he gets some benefit out of it in some respects, but not in others. And the ones that matter to us most are the ones in which his inconsistency is just an expression of, in a sense, long-term failure. And whatever comes out of this MAGA republicanism, however long it lasts, whether it's over after Trump in 2028 or whether there's another eight years of it after of that even longer.

17:47Whatever comes out of this MAGA Republicanism, I'm convinced that America will be much, much weaker in world politics, partly because of exactly that inconsistency and the sense that America doesn't stand for anything apart from what this man in the White House gets up and worries about first thing in the morning. Michael, always a pleasure. Thanks very much. And that is your lot for today. Do get in touch with your thoughts. You always seem to have plenty when Michael appears on the podcast. What do you make of the U-turn from Donald Trump? Remember, he has withdrawn that threat to charge 20 % tariffs on all ships protected by the States.

18:21Was he ever going to go through with it, do you think? Let me know why at Sky.uk. We're back tomorrow.

18:46humanity. 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.