Trump is notorious for talking tough and making threats, taking impetuous actions, and then when he finds that he cannot carry out the threats or gets severe blowback, backtracking. Perhaps the most blatant example of this was with the tariffs which changed from day to day on his whim but he has also done that with things like saying he wants to take over Greenland, a bit of braggadocio that seems to have slipped into the memory hole when Denmark and other European countries presented a united front opposing the move. He does not even talks about it anymore.
As another example, take Trump’s threat to Iran on Saturday that if they did not open the Strait of Hormuz within 48 hours he would launch attacks on their oil infrastructure. This caused a sharp rise in oil prices and a massive drop in stock prices (one of the few things he cares about) and so he then said that thanks to Iran starting talks with the US, he was postponing the action.
Oil prices, which had been rising after Trump threatened over the weekend to strike Iranian infrastructure unless Iran opened the strait of Hormuz, dropped sharply. Brent crude, the international benchmark, fell 10% to $101 a barrel. The UK month-ahead gas prices fell 6% to 142p a therm.
The US president said on his social media platform Truth Social that the US and Iran had “very good and productive conversations” over the past two days regarding “a complete and total resolution of our hostilities in the Middle East”.
He said: “Based on the tenor and tone of these in-depth, detailed, and constructive conversations, which will continue throughout the week, I have instructed the Department of War to postpone any and all military strikes against Iranian power plants and energy infrastructure for a five-day period, subject to the success of the ongoing meetings and discussions.”
This caused stock prices to bounce back yesterday. (One thing I do not understand is why investors react to the words of Trump. He is such a liar and so erratic that it would seem pointless to make decisions based on what he says he will do in the future. And yet it appears that many of them do.)
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