With a host of varied economic woes, Iran may not be in the best position for a war. But what could a war hold for the United States, which is already dealing with its hotly debated trade war?
The United States certainly isn’t going to be broken by a war in Iran — the country has funded more significant wars in the past with limited economic interference. At the same time, it’s not the best time for America either.
So, what would a U.S.-Iran conflict mean for America’s booming economy? Let’s take a look.
Trump Remains Against the Idea of War in Iran
While many have stated that Trump is moving towards the idea of a war in Iran, those in the administration have stated that the opposite is true. In fact, Trump is hesitant to become embroiled in a costly war. During his campaign, he had indicated that he would avoid war when possible, and that he would focus on diplomacy. War is expensive.
However, that doesn’t mean that he hasn’t been taking action or that he hasn’t been pressuring Iran. Rather than going to war, the administration has been attempting to deal with other nations via economic means. In the case of Iran, the intent has been to deny the country revenue from its oil. Unfortunately, some officials and experts still believe that Iran could be dangerous even if economically sanctioned.
Presently, Iran’s economy is already struggling — and it has very little to lose during a war. This is one reason why the United States has been primarily pushing economic sanctions on the country. Unfortunately, it’s these economic sanctions that are also making Iran desperate.
Iran May Be Working towards Conflict
Some factions are concerned that the White House could be manufacturing claims against Iran as a motive towards war. Traditionally, war often increases the approval rating of sitting presidents, as well as giving the administration more control over the country as a whole. However, whether or not the White House as a whole wants war, Iran is likely moving towards conflict on its own.
It’s suspected that Iran has been sabotaging oil tankers in the region, as well as arming revolutionary groups that the United States has previously declared to be terrorists. Iran and the United States have never had a positive relationship, but this is escalating now. Largely, this is because the Trump Administration has taken action to isolate Iran in the last few years.
The Economic Consequences for the United States
What would war in Iran mean for the United States? All other issues aside, it would be expensive. The US has some support for war in Iran, so it’s not likely to experience a significant amount of international blow back. The major issue would be the tremendous outlay of cash and resources, during a time period when tariffs and economic volatility are already creating significant issues on the ground.
The costs of the Iraq war are estimated to $1.9 trillion, at a cost of about $6,300 per American taxpayer. While the Iraq war doesn’t have a one-to-one correlation to the Iran war, it could lead to a similar price tag if the war is drawn out. In estimates, war costs about $100 to $150 billion a year for the United States, which is a significant amount that it could be used towards both development and infrastructure.
During a trade war that is costing many industries between 10% to 25% of revenue, a further increase in costs could be devastating.
However, many of the United States’ allies are supporting a war against Iran, and if Iran takes the first step towards war, it may be unavoidable. Oil-producing countries such as Saudi Arabia have much to gain from oil-related sanctions, but it isn’t just Saudi Arabia: it’s also Israel. With the United States already embroiled in a trade conflict with China, as well as continued military action throughout the Middle East, the true consequences could be significant.
That being said, many are skeptical that this will escalate to outright war. Tensions between the United States and Iran have existed for a very long time, and they may already be cooling. A war would be costly for everyone involved, and may not have any substantial benefits — but Iran does remain a wild card specifically because it has nothing to lose.
Regards,
Ethan Warrick
Editor
Wealth Authority
