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Early Monday morning, financial markets surged when President Trump claimed there had been productive talks with Iran about ending the war. Therefore he backed off a vow to bomb Iranian power plants if the Strait of Hormuz wasn’t reopened by Monday evening. Iran denies any such talks actually took place.

This is a rare moment in which reasonable people can be torn about which government is more believable.

Regardless, markets were buoyed by the hope this might be another TACO moment — Trump Always Chickens Out — and the belief that he was looking for an offramp.

I have no idea whether this partial pause will last, whether Iran will grab Trump’s lifeline, or whether markets will stay upbeat. And neither does anyone else. But whichever way things go in the days and weeks ahead, we’ve already (re)learned some useful lessons.

For starters, overall success is dependent on more than military success. Critics and supporters of the war have been talking past each other since it started because it has been extremely impressive militarily. But politically, geo-strategically and economically it’s been far murkier.

That’s because Iran has an asymmetric advantage. It can disrupt the Strait of Hormuz, through which roughly 20% of the world’s oil, and numerous other vital resources, including fertilizer and natural gas, are shipped. It can also strike its neighbors’ oil and gas facilities.

It’s like Iran is a beaten weakling holding a vial of nitroglycerin in the engine room of the global economy. You can take him out, but only at great peril.

As the Economist recently put it, “Although President Donald Trump says he has ‘destroyed 100% of Iran’s Military Capability,’ the 0% that remains is playing havoc with the global economy.”

Economic vulnerability is nearly synonymous with political vulnerability and political vulnerability is strategic vulnerability. It’s great that the Iranians haven’t blocked the strait with thousands of mines as military textbooks foresaw, but if it’s impassable because ships are uninsurable, the results are largely the same.

That’s why I have some sympathy for the administration’s effort to deal with the economic challenge it didn’t adequately prepare for.

That effort includes releasing oil from the Strategic Petroleum Reserve, waiving Jones Act rules that require American-flagged and built ships to transport oil for American markets and lifting some sanctions on Russian oil (a boon to President Vladimir Putin).

And, most remarkably, Treasury Secretary Scott Bessent announced a temporary suspension of Iranian oil sanctions for already oil-laden ships parked in the strait.

This is exceedingly unusual. Normally, one intensifies economic blockades on enemies in wartime. But that doesn’t mean it’s necessarily a bad idea if it works to lower prices. (Although the fact that this could potentially give Iran 10 times more money than President Obama did when he reportedly sent them pallets of cash to secure the Joint Comprehensive Plan of Action is pretty wild.)

I’m skeptical Trump’s effort to single-handedly manage the price of oil will work. For whatever momentary relief it provides markets, it also demonstrates that Iran’s got leverage.

But here’s what I find fascinating. The Trump administration has been obsessed with maximizing the president’s war powers to justify his agenda on such things as industrial policy, immigration, domestic deployment of the National Guard and, most glaringly, trade. But now, when we’re actually at war, they’re reversing their economic philosophy in service to Trump’s seat-of-the-pants decision-making.

Trump’s trade policies are exactly what the great 19th century economist Henry George had in mind when he warned, “What protectionism teaches us, is to do to ourselves in time of peace what enemies seek to do to us in time of war.”

What’s so strange is Trump’s turning George on his head, by easing economic pressure on our wartime enemy. But he’s also reversing his own biases by liberating our domestic economy.

Of course, sanctions are more coercive than tariffs, but economically they operate on the same logic: Sanctions restrict exchange, reduce supply and raise costs. The administration is in effect conceding that supply restrictions — i.e., tariffs — raise prices and that relaxing them lowers prices. It usually scoffs at such market logic when defending tariffs or domestic shipping restrictions.

The Jones Act, an egregious economic albatross conceived in the wake of World War I that makes all manner of goods more expensive in peacetime, is being waived during wartime, even though the point of the Jones Act is to leave us better prepared to fight wars.

I wish I could believe that the Trump administration was actually learning any of these lessons and that they might endure after this war eventually ends. But at this point, that lesson is beyond his ability to learn. Trump believes he’s not just the master of his fate, but everyone else’s as well.

Iran war rages on heading into fifth week, as Trump maintains that U.S. has ‘already won’ March 27, 2026

Iran war rages on heading into fifth week, as Trump maintains that U.S. has ‘already won’

Wall Street has its worst day since the war with Iran started and crude oil prices rise March 26, 2026

Wall Street has its worst day since the war with Iran started and crude oil prices rise

Trump projects confidence, claims Iran is ‘begging’ for deal, but war exit remains murky March 26, 2026

Trump projects confidence, claims Iran is ‘begging’ for deal, but war exit remains murky

L.A. Times Insights delivers AI-generated analysis on Voices content to offer all points of view. Insights does not appear on any news articles.

The following AI-generated content is powered by Perplexity. The Los Angeles Times editorial staff does not create or edit the content.

Ideas expressed in the piece

The Trump administration’s military campaign against Iran has achieved tactical success, though this does not guarantee favorable political, geostrategic, or economic outcomes. Economic disruption from the conflict represents a significant vulnerability that translates directly into political and strategic weakness for the United States.

The Trump administration’s military campaign against Iran has achieved tactical success, though this does not guarantee favorable political, geostrategic, or economic outcomes. Economic disruption from the conflict represents a significant vulnerability that translates directly into political and strategic weakness for the United States.

Iran possesses asymmetric leverage through its ability to disrupt the Strait of Hormuz, which carries approximately 20% of the world’s oil supplies, as well as through strikes on regional energy infrastructure. This capacity to inflict economic damage, even as a militarily weaker opponent, fundamentally constrains American strategic options regardless of military achievements.

Iran possesses asymmetric leverage through its ability to disrupt the Strait of Hormuz, which carries approximately 20% of the world’s oil supplies, as well as through strikes on regional energy infrastructure. This capacity to inflict economic damage, even as a militarily weaker opponent, fundamentally constrains American strategic options regardless of military achievements.

The Trump administration’s economic countermeasures—including Strategic Petroleum Reserve releases, Jones Act waivers, Russian oil sanctions relief, and temporary suspension of Iranian oil sanctions—represent a pragmatic if imperfect response to market instability, though the author expresses skepticism about their ultimate effectiveness.

The Trump administration’s economic countermeasures—including Strategic Petroleum Reserve releases, Jones Act waivers, Russian oil sanctions relief, and temporary suspension of Iranian oil sanctions—represent a pragmatic if imperfect response to market instability, though the author expresses skepticism about their ultimate effectiveness.

The administration’s wartime economic policies contradict its peacetime trade philosophy. The waiving of sanctions and tariff-like restrictions during wartime implicitly acknowledges that supply restrictions raise costs and prices, a principle the administration typically dismisses when defending protectionist policies outside military conflict.

The administration’s wartime economic policies contradict its peacetime trade philosophy. The waiving of sanctions and tariff-like restrictions during wartime implicitly acknowledges that supply restrictions raise costs and prices, a principle the administration typically dismisses when defending protectionist policies outside military conflict.

The Trump administration’s decision to ease economic pressure on an enemy during wartime constitutes a reversal of conventional wartime strategy, which typically involves intensifying economic blockades rather than relaxing them, even if such measures could lower commodity prices.

The Trump administration’s decision to ease economic pressure on an enemy during wartime constitutes a reversal of conventional wartime strategy, which typically involves intensifying economic blockades rather than relaxing them, even if such measures could lower commodity prices.

Different views on the topic

President Trump has expressed optimism about diplomatic resolution, claiming productive discussions have occurred with Iranian officials and identifying multiple points of agreement, including Iran’s commitment to nuclear limitations[1]. Trump has indicated he believes Iran wants peace and has taken concrete steps to facilitate negotiations, including a five-day suspension of planned military strikes[1].

President Trump has expressed optimism about diplomatic resolution, claiming productive discussions have occurred with Iranian officials and identifying multiple points of agreement, including Iran’s commitment to nuclear limitations[1]. Trump has indicated he believes Iran wants peace and has taken concrete steps to facilitate negotiations, including a five-day suspension of planned military strikes[1].

The military campaign has demonstrated significant tactical effectiveness against Iranian military capabilities and regional energy infrastructure, suggesting that continued military pressure remains a viable strategy for achieving strategic objectives[1][2].

The military campaign has demonstrated significant tactical effectiveness against Iranian military capabilities and regional energy infrastructure, suggesting that continued military pressure remains a viable strategy for achieving strategic objectives[1][2].

Gulf states, including the United Arab Emirates, have begun considering military participation in operations against Iran, indicating potential regional support for continued military action and suggesting broader strategic consensus regarding Iran’s threat level[2].

Gulf states, including the United Arab Emirates, have begun considering military participation in operations against Iran, indicating potential regional support for continued military action and suggesting broader strategic consensus regarding Iran’s threat level[2].

Energy market disruptions, while significant, may prove temporary. Analysts note that if conflicts resolve quickly, oil prices could drop substantially—for example, declining to $68 per barrel if the Strait of Hormuz reopens after one quarter[3]. This perspective suggests that economic pain is manageable if military objectives are achieved rapidly.

Energy market disruptions, while significant, may prove temporary. Analysts note that if conflicts resolve quickly, oil prices could drop substantially—for example, declining to $68 per barrel if the Strait of Hormuz reopens after one quarter[3]. This perspective suggests that economic pain is manageable if military objectives are achieved rapidly.

Strategic analysts have emphasized that Iran’s disruption capabilities, while notable, can be partially mitigated through alternative supply routes such as Saudi Arabia’s East-West pipeline to the Red Sea, which could redirect approximately one-fifth of the global supply shortfall and substantially reduce economic impact[3].

Strategic analysts have emphasized that Iran’s disruption capabilities, while notable, can be partially mitigated through alternative supply routes such as Saudi Arabia’s East-West pipeline to the Red Sea, which could redirect approximately one-fifth of the global supply shortfall and substantially reduce economic impact[3].

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