As the conflict in Iran stretches into its fourth day and threatens to spill over into the wider region, the staggering financial and strategic costs the U.S. is incurring to finance its military efforts are colliding with a sobering admission from the Oval Office.
Since military strikes targeting Iran’s leadership began on Saturday, the Trump administration has provided several explanations to justify its campaign, although has refrained from explicitly mentioning a change in leadership as a clear-cut goal—despite its outcome so far effectively amounting to a decapitation. Over the weekend, President Donald Trump claimed initial strikes had killed as many as 48 members of Iran’s leadership, including Supreme Leader Ali Khamenei.
“This is not a so-called ‘regime change war’, but the regime sure did change,” Defense Secretary Pete Hegseth said during public remarks Monday.
But for Trump, the attack’s sweeping scale has also been accompanied by a lack of clarity as to what comes next, specifically to plug a gaping leadership vacuum without risking a reversion to Khamenei’s dictatorial rule. It’s a challenge of which even Trump is painfully aware.
“The worst case would be we do this and then somebody takes over who’s as bad as the previous person,” Trump said during public remarks Tuesday, outlining a worst-case scenario that might mirror the very instability the military operation was ostensibly designed to resolve.
“It would probably be the worst. You go through this, and then, in five years, you realize you put somebody in who was no better,” Trump stated.
The president’s candid assessment came as voices in the U.S. and abroad criticize the administration for its apparent lack of a plan on how to resolve Iran’s leadership program. Those questions have become especially pointed as estimates of the war’s cost are released. Kent Smetters, director of the Penn Wharton Budget Model, recently told Fortune the total economic toll on the U.S. could reach as high as $210 billion. This figure accounts for direct military expenditures—estimated at up to $95 billion—alongside massive disruptions to trade, energy markets, and financial conditions around the globe.
U.S. involvement in Iran might change in scale. For one, its campaign could soon run out of munitions for key weapons, but the war’s price tag could rise the longer it lasts and if it eventually involves more factions and belligerents from elsewhere in the region. Prolonged disruption affecting oil and gas production in the Middle East could lead to higher inflation and slower economic growth worldwide, Mohamed El-Erian, Allianz’s chief economic advisor, warned this week.
An unfavorable audience
The lack of a clear succession plan in Iran is part of what has many Americans concerned about U.S. involvement in another potential “forever” war in the Middle East. A Reuters/Ipsos poll shows 43% of Americans disapprove of the war. A CBS survey conducted on Monday and Tuesday also found 62% of Americans do not think the Trump administration has yet to fully explain what the U.S. military goals are in Iran.
The absence of an endgame has also alarmed lawmakers.
“It’s like we’re going to break all the china and you guys decide how to put it back together,” Sen. Tim Kaine (D-Va.) said Sunday. And Tuesday, Rep. Adam Smith (D-Wash.), called the administration’s approach “incredibly costly” while speaking to Fox News.
The economic fallout is already being felt globally. Gas prices across the U.S. jumped $0.11 overnight on Tuesday. While Trump insisted Tuesday oil prices would eventually drop “lower than even before,” the immediate reality is one of mounting uncertainty and geopolitical friction. Allies including Spain and the U.K. refused to participate in the initial strikes, with Spain’s President Pedro Sánchez declaring the war a violation of international law, prompting Trump to respond by threatening to cut off trade with the country.
While Trump has called on the Iranian people to “take over” their government, his administration has offered no support to the civil-society who might build a rule-of-law society, Atlantic reporter Anne Applebaum wrote over the weekend. She warned the vacuum left by the attacks might be filled by breakaway groups within the Revolutionary Guard or other fanatical factions. She also noted how some of the Trump administration’s actions over the past year, including funding cuts to international broadcaster Voice of America—which previously provided daily news service in Persian servicing citizens of authoritarian regimes like Iran’s—had set up more obstacles to Iran’s future.
