Trumps squares off against Spain as he resumes war against Iran

(Originally published July 9 in “What in the World“) Trump’s forever war with Iran is back on.

U.S. forces launched a second day Wednesday of retaliatory attacks on Iran after Trump said while in Ankara for a blustery summit of the North Atlantic Treaty Organization that the ceasefire deal with the “Islamic Republic of Japan” was over after Iran attacked three commercial vessels in the Strait of Hormuz. U.S. refueling planes reportedly returned to the region. Trump also rescinded his 60-day permission slip for Iran to sell oil. Iran threatened to shut the Strait again, where traffic remains at roughly a quarter pre-war levels.

Resumed conflict pushed oil prices higher, reviving fears that inflation will remain high. That increases the likelihood that the U.S. Federal Reserve will raise rates. Minutes from last month’s meeting of the Fed’s rate-setting committee showed that members agreed they would raise rates if inflation remained high. But along with high energy prices, they believed inflation was being stoked by rampant investment in AI. Markets are growing increasingly confident the Fed will raise rates in September.

Just for good measure, Trump also ordered a blockade of trade with Spain for failing to allow U.S. forces to use its bases or airspace for the war on Iran, and for refusing to fellow NATO members’ commitment to raise defense spending to 5% of GDP. “I don’t want anything to do with Spain,” Trump told U.S. Treasury Secretary Scott Bessent in Ankara. “Cut off all trade with Spain, please, including visits, OK?”