Trump and Republicans are hoping things quickly go back to normal as the fallout from his deeply unpopular war with Iran spreads. But the economic consequences could stretch far beyond the length of Trump’s war with Iran. Near record-high gasoline prices, higher mortgage rates, and stalled fertilizer shipments will take months to recover. Farmers are already shifting away from growing corn as a result of the conflict, which could cause food prices to spike well into 2027. Trump clearly has no plan to get us out of this huge mess quickly. On Friday, he vowed to bomb Iran back into the “Stone Ages,” and threatened to destroy the country’s infrastructure just yesterday. Meanwhile, Americans are already dealing with GOP policies that have led to mass layoffs, zero job growth, and high prices on everything from health insurance premiums to electric bills – all so Trump and Republicans can give billionaires more tax breaks. Read more about the economic costs of Trump’s war with Iran to come:
TRUMP’S IRAN WAR IS SPIKING COSTS FOR MONTHS TO COME
- Oil prices could surge to $200 a barrel if the Strait of Hormuz remains closed.
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- Persistently high petrochemical prices could impact long-term plastics pricing.
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- Persistently high jet fuel prices could alter flight paths and force airlines to cancel thousands of flights.
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- Kevin Book, managing director of research firm ClearView Energy Partners: “If reopening the Strait doesn’t rebalance supply and demand, or if the Strait doesn’t reopen for a long time, then economic calamity is likely to follow.”
- Global gasoline prices could take months to recover due to lasting damage to energy infrastructure in the Middle East.
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- Large companies, from Amazon to fresh food distributors, are already passing fuel and logistics surcharges onto buyers; these surcharges are unlikely to disappear, if they do at all, until gasoline prices recover.
- Mark Zandi, chief economist at Moody’s Analytics: “I don’t think we’re going back to the pre-war prices for the foreseeable future. Certainly won’t be this year, won’t even be next year. Might not be ever.”
- Higher mortgage rates will take time to recover, and realtors predict that the spring house-buying season will be delayed as home-buying stalls across much of the country.
- Food prices are expected to increase even more in the coming weeks.
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- Farmers’ narrow window for planting season is quickly closing. High fertilizer prices driven up by Trump’s war in Iran have already pushed farmers away from corn and toward soybeans, which could lead to higher grocery prices well into 2027 for everything from processed foods to condiments and snacks made from corn or sweetened by high-fructose corn syrup.
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- Fertilizer shipments from the Middle East take 30-45 days to reach the U.S., making it even less likely that lower fertilizer prices will come quickly.
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- Ricky Volpe, former USDA economist: “We’re already past the point of no return. The question is, how pronounced will it be and how long will it last?”
- Topline inflation is expected to hit 4% in the next few months.
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