Where the Iran War Goes From Here

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**Ravi Agrawal** (0:23)
Hi, I'm Ravi Agrawal, Foreign Policy's Editor-in-Chief. This is FP Live.
So a two-week ceasefire between the United States and Iran was supposed to expire on Tuesday. Just hours before it did, US. President Donald Trump announced he was extending it unilaterally. He also said the US would continue to block ships from accessing Iranian ports, a move that the Iran says is an act of war. So are we in a ceasefire or are we at war?
Karim Sadjadpour has been on this show before and is well known for his superb analysis of Iran and the region. We spoke on Wednesday, the 22nd of April, and I will bring you that interview in just a minute. But first, I thought I'd share my read on an aspect of the war that is not getting enough attention.
There's little doubt that Americans are feeling economic pain from the war. The price at the pump is up by a third. But as newspapers and cable news shows dissect polls showing how the war is making Trump less popular, it began to strike me that in relative terms, Americans actually are not really feeling that much economic pain, at least not like people in the Middle East or Asia are.
Why is that? The United States has some key advantages that most other countries don't. It is geographically blessed with no real adversaries nearby. It has become a true energy superpower, the world's biggest producer of oil and natural gas. It enjoys what is known as the exorbitant privilege of dollar supremacy. Ninety percent of all international commodities are traded in dollars. A strong dollar benefits US importers. And of course, the US stock market is doing just fine. And that's partly because of a generational AI boom.
All of those strengths translate into weaknesses for much of the rest of the world, but especially Asia. Asian economies account for 40 percent of the world's energy demand. Almost all of them are net importers. Pakistan, for example, gets 80 percent of its crude from the Gulf. Bangladesh imports 95 percent of its energy. Energy shocks are like a triple whammy for these countries. They are more dependent, so they have very few options. They have to buy energy in dollars that are more expensive, and they're already in economic trouble, so they have less fiscal room to subsidize energy. So while Americans are facing some pain at the pump, and with booking more expensive flights, and I don't want to diminish any of that pain, we must acknowledge that people from Manila to Dhaka to Islamabad are facing all of that, and reduced work weeks, and the closure of universities. People in Asia are having to cut back on cooking gas. These are real daily sacrifices among people who already don't make that much in relative terms, and spend a much greater proportion of their money on food and energy.
And this is not just about energy. So many other commodities are affected. To take just one other example, petroleum products go into the manufacturing of thread. The price of thread is up by 50 percent in Bangladesh. So at some point, Uniqlo and Zara, which manufacture there, are going to have to pass that pain on to consumers in the West. And that's the final point I wanted to make here. People in the Gulf, in Asia, and in much of the Global South, have suffered disproportionately from the last few weeks of war. That gets lost in the conversation in the United States about the costs of war. But even so, the longer this goes on, supply chains will come back to hurt Americans more than they currently are, and in the most unexpected ways. From something as simple as the clothes you wear, to the phone you're probably listening to this on, which relies on helium that is currently held up in the Strait of Hormuz. We are looking at a supply shock that could get a lot worse. I wrote about this in FP this week, and there's a gift link in the show notes.
Okay, on to this week's interview, where we can hopefully shed some light on where the war might head. My guest is Karim Sadjadpour, a Senior Fellow at the Carnegie Endowment for International Peace. Make sure to check out our website, foreignpolicy.com, for a lot of related reading. Let's dive in.
Karim, welcome back to FP Live.

**Karim Sadjadpour** (5:17)
Thank you, Ravi. Great to be with you.

**Ravi Agrawal** (5:19)
So let's just start with the status quo. What's your understanding of where things stand between the United States and Iran right now?