President Trump has made a momentous decision that will color the final year of his first presidential term and either boost his odds of reelection, or kill them.
By ordering the fatal airstrike on Iranian Gen. Qassem Soleimani, Trump has sharply escalated tensions with Iran and probably set in motion a series of reprisals that will unwind throughout 2020. Financial markets won’t tumble on this alone, but oil prices could remain elevated all year as traders worry about a broader war breaking out and oil facilities ending up damaged.
Higher oil prices wouldn’t cause a U.S. recession or hurt the economy all that much, unless they soared to $100 or more. The United States produces more oil than ever before, on account of hydraulic fracking, and higher prices are a boon for oil-patch economies.
But there’s now a new geopolitical worry to layer on top of Trump’s trade protectionism and his impeachment trial in the U.S. Senate. Everyone knows Iran is capable of large-scale terror events and damaging military attacks. Yet the Iranians may hold back, to avoid a full-on military confrontation with the United States. For now, the Trump-o-meter rates Trump’s decision as WEAK, the third-lowest rating, because it may have been unnecessarily impulsive and poorly thought out.
The Soleimani killing dates to Trump’s decision to withdraw from the Iran nuclear deal his predecessor, Barack Obama, put in place in 2015. That deal eased sanctions on Iran—especially its ability to sell oil—in exchange for Iran’s pledge to suspend development of nuclear weapons. Trump rescinded the deal in 2018, reimposing sanctions on Iran, which have hurt its economy. Iran has been lashing out ever since, including attacks on U.S. bases and interests in Iraq by Iranian-backed militias in the country.
One such militia attack linked to Iran killed an American contractor in Iraq on Dec. 27. The United States bombed the militia in retaliation on Dec. 29. That led to violent protests fomented by Iran at the U.S. embassy in Baghdad. Then came the Jan. 2 strike that killed Soleimani and five others.
Soleimani masterminded terrorist operations for Iran in the Middle East and elsewhere. He was undoubtedly an enemy of the United States. But he was also a senior official of a sovereign nation, equivalent to the U.S. defense secretary or CIA chief. And he’s now a martyr in Iran. The huge question for Trump: What will be the cost of killing him?
Some sort of retaliation seems certain. Analysts at the Eurasia Group think it’s most likely Iran will strike back within Iraq itself, using those same militias to target U.S. military bases and other facilities. Civilians seem vulnerable, to the extent Iran can reach them. Iran also has capable cyberwarriors who could try to hit the U.S. mainland with hacks or other kinds of digital attacks.
Iran would probably prefer to see Trump lose in 2020, and deal with a Democrat inclined to restore the terms of the Obama-era nuclear deal. So it’s plausible Iran could plan a terror attack or some other disruption for the eve of the 2020 election. That’s cause for concern throughout 2020, even if it doesn’t happen. Which is why Trump better know what he’s gotten himself into.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: email@example.com. Encrypted communication available. Click here to get Rick’s stories by email.