US Launches New Strikes on Iran as Hormuz Traffic Slumps

**SPEAKER_1** (0:02)
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This is Bloomberg Businessweek Daily, reporting from the magazine that helps global leaders stay ahead, with insight on the people, companies, and trends shaping today's complex economy, plus global business, finance, and tech news as it happens. The Bloomberg Businessweek Daily podcast with Carol Massar and Tim Stenovec. On Bloomberg Radio.

**Carol Massar** (0:32)
We also continue to keep an eye on what's going on in the Middle East. The war between the US and Iran continuing. The US intensifying strikes against Iran overnight, hitting an oil tanker near the country's main export terminal. A shipping traffic slump through the critical Strait of Hormuz. Iran responded by firing at American bases in Kuwait and Jordan, and Tehran seems in no mood to back down in the face of President Trump's warning that he will escalate strikes.

**Tim Stenovec** (0:58)
We head to the Bloomberg News, Washington, DC Bureau, and to our national security reporter, Nick Wadhams, who joins us from there. Nick, we as a nation, the question I think a lot of people have, I don't know, Carol was asking this question earlier, are we less secure or are we more secure the longer this war between the US and Iran goes on?

**Nick Wadhams** (1:20)
Are we less secure?
You know, I think the big question that you have to look at this from a few angles, one is obviously US bases in the region and US allies, so their willingness to sort of partner with the United States in the long term. Big question there, they are obviously getting a lot more anxious given that Iran's way of responding has been to attack US allies as well as US bases. So service members in the region, certainly less secure. I would say that hasn't really bled over into the United States itself, though obviously there are assassination plots against the president where they've accused Iran of trying to do that. So that is a big concern. Economically, I think on this very much an open question and a much more difficult one, oil going back up. The president had said when he had signed that ceasefire, listen, we wanted to avoid economic catastrophe. Well, here we are again. They're looking to potentially ramp up strikes again. And you can bet that that will have real aftershocks for the economy and it will hit people's pocketbooks back home.

**Carol Massar** (2:23)
Well, speaking of such, the US forces began conducting a new wave of strikes on Iran, so it continues and it goes on and on. One of the things that we have been talking about as a team, Nick, is military stockpiles. Where are we?
You've got the Ukraine war with Russia, whatever assist the US has been providing there. Obviously, its efforts, its actions with the war with Iran. Where are we? Just yesterday, President Trump was talking about calling military contractors to speed up production. A lot of them were at this event in Pennsylvania with him.

**Nick Wadhams** (2:55)
Right.
Well, there are so many issues there, but certainly, the information we have here, I mean, the administration is not disclosing the extent of its stockpiles for some of its more advanced weapons systems. But certainly, when you fire a lot of cruise missiles and bombs at Iran, that means you can't use those weapons or stockpile those weapons if conflict should arise elsewhere. We've seen that strain, especially on the ballistic missiles, on patriot missiles and things like that, which cost millions of dollars and take years to produce. And then we've also seen on the flip side, the US has really struggled to ramp up production of certain other munitions, such as 155-millimeter shells for artillery that were so desperately needed in Ukraine. Obviously, that's not as much of an issue for President Trump because he's not supplying those weapons as much as Joe Biden was. But you do see this issue across the defense sector, which is why it's so important to the president. Defense companies are not able to ramp up as quickly as he wants, and that's also pushed a real question for other countries that want to buy those things from the United States. The wait list there sometimes goes for years.

**Tim Stenovec** (4:09)
Nick, we covered this lay yesterday, and I want to get your take on this. The Wall Street Journal with reporting yesterday that said that the president is leaning toward expanding US military operations in Iran, hosting a situation remitting on Tuesday to discuss the seizure of Karg Island, questions about the actual presence of troops in the area as well. What's your reporting telling you about the way that this could escalate?

**Nick Wadhams** (4:36)