US President Donald Trump is in a bind: he can neither restart the war nor bring Iran to the negotiating table.

The Tehran regime has clearly declared that it “will not negotiate under pressure”. Conversely, the US cannot launch a fresh offensive either. As US political scientist Prof. Dr John Mearsheimer has noted, “Air power has failed, and ground power is impossible.”

The White House is therefore unable to devise an exit strategy and is pursuing a tactic of constantly extending the ceasefire. For the US to exit in this manner would mean both a defeat for Trump in the November election and a ‘defeat’ for the US itself.

And if the US cannot change the situation, this outcome will have seven significant consequences:

The shift away from the dollar and the role of the yuan

1) One of the key reasons behind the US’s attacks on Venezuela and Iran was petro-politics. Even the US’s ally, Saudi Arabia, had begun selling oil to China in yuan. The start of oil and natural gas sales in currencies other than the dollar signifies the end of the dollar’s reign and a catastrophe for the US economy. 

Thus, as the US fails to contain Iran, it will also be unable to curb the trend of moving away from the dollar. The symbolic significance of Iran—which has closed the Strait of Hormuz to the US and its allies—accepting the yuan for authorised transit is immense. In the new era, the yuan’s role in global trade will grow.

The issue of the US security umbrella

2) One of the most significant consequences of the US failing to contain Iran is that interest in US protection will wane. As seen in Iran’s retaliatory strikes, the US ‘security umbrella’ in the Gulf states is proving ineffective; targets in Saudi Arabia, the UAE, Qatar and Kuwait have been struck. 

3) The US’s failure to contain Iran could trigger a new trend in the countries it uses as bases against China, particularly South Korea and Japan, where US troops are stationed. Given that the US could not even protect its Gulf allies against Iran, questions will arise as to how it would protect South Korea and Japan against China in a potential conflict. In these countries, a policy of pursuing independent and balanced relations with China, separate from US strategy, will gain strength.

Division in the Atlantic

4) The US’s failure to overcome Iran has deepened the rift within the Atlantic. Allies have rejected US requests for assistance against Iran. New burdens added to relations already strained by the trade war and the US’s threats against Canadian and European (Greenland) territories will exacerbate the rift within the Atlantic. Europe has even taken steps to establish a defence capability independent of the US.

5) The existing relationship between the US and its allies is one in which the US holds the upper hand. Indeed, Washington even secures laws in its allies’ parliaments that favour US companies. 

Another likely consequence of the US failing to overcome Iran is that it will begin to alter such relationships. The one-sided nature of the US’s relations with its allies will weaken, and these ties will be forced towards a more balanced state. Many allies will now be able to pursue certain policies independently, without aligning them with US strategy.

Israeli aggression will be curbed

6) One of the aims of the US attack on Iran was to establish a new Middle Eastern order under Israeli hegemony. Having failed to contain Iran, the US will naturally be unable to establish that order. This will have a very serious impact on Israel and US projects in the region.

Projects developed by the US in recent times, such as the ‘Trump Corridor’ in the South Caucasus, will face pressure to shorten their timelines. 

The entity most affected by this situation will be Israel, the US’s forward outpost in the Middle East: Israeli aggression will be curbed, a very serious power struggle will unfold within Israel, and a tendency among the Israeli public to recognise Palestine and live in peace will gain strength.

7) Having failed to overcome Iran, the US will no longer be able to single-handedly dictate the direction and decisions of global relations. The US defeat in Iran signifies the end of its global leadership and a shift in the international system. China will rise to a position of equal influence with the US within the international system. This will have various implications for the international order and relations.