March 27, 2026
William Pesek
Investors
have fled to dollar safety during the Iran war. Image: AI GeneratedThe baht’s dubious honor of being
Asia’s worst-performing currency amid surging oil prices is making headlines
and triggering more than a little PDST. It was Bangkok’s devaluation in July
1997 that set in motion the Asian financial crisis. The baht’s 6% drop in March
has investors scrambling to connect the dots to where things are heading.
The threats, of course, come from abroad. As the US-Israeli war in Iran drags on, surging oil is becoming more of a feature than a bug. In Thailand’s case, a heavy dependence on imported crude has traders betting on the implications of additional commodity swings and capital outflows.
Yet exacerbating that is the surging US dollar, which once again threatens to suffocate Asian currencies. This double whammy of risk has governments across the region scrambling to sandbag financial systems as best they can. Back in 1997, the rallying dollar also played an outsized role in the crisis.
That reckoning had its roots in the Federal Reserve’s 1994-1995 tightening cycle. At the time, the Fed doubled short-term interest rates in just 12 months. That extreme tightening cycle, led by then-Fed Chair Alan Greenspan, tipped Mexico into crisis, helped bankrupt Orange County, California, and saw Wall Street bond giant Kidder, Peabody & Co. closing its doors. Then the Fed’s rate hikes came for Asia.
By 1997, the resulting surge in the dollar made it impossible to maintain Asia’s currency pegs. First, Thailand devalued. Next Indonesia. Then South Korea. All three went hat-in-hand to the International Monetary Fund and other agencies for giant bailouts totaling US$118 billion. Though neither sought bailouts, the turmoil also pushed Malaysia and the Philippines to the brink.
Since then, the emerging markets have been very sensitive to the specter of the Fed hiking rates. Case in point: the 2013 Fed “taper tantrum.” Market jitters over mere hints that the Fed might be hitting the brakes prompted Morgan Stanley to publish a “fragile five” list on which no emerging economy wanted to be. The original group: Brazil, India, Indonesia, South Africa, and Turkey.
Now, a surging dollar is complicating Asia’s development plans anew. History’s greatest magnet is luring capital from every corner of the globe, hogging wealth needed to finance budget deficits, keep bond yields stable and support equity markets.
The Iran war has the dollar’s wrecking-ball tendencies bursting back onto the scene. Despite the US national debt nearing $40 trillion, high inflation, and US President Donald Trump’s tariffs, tax cuts and profligate spending, the dollar is rising — against all odds.
The dollar is even outshining gold, the price of which is well off its all-time high of $5,608 per ounce in January. And its rally has currency traders joking that the dollar is the new Bitcoin.
“It doesn’t look like the conflict will end anytime soon,” said strategist Carol Kong at Commonwealth Bank of Australia. “The dollar is king while this conflict lasts. If we’re right about this conflict being protracted, I think oil prices will just keep rising and it will push the dollar higher, at the expense of net energy importers like the Japanese yen and the euro.”
All this could be a clear and present danger for Asia in 2026. For Asia, having commodity prices “go up when their exchange rates are already weak is doubly painful,” said Harvard economist Kenneth Rogoff.
The about-face in the baht demonstrates what’s at stake. After a strong run in late 2025, the baht has fallen to earth as oil prices have surged close to 50% this month. It’s now performing even worse than the Indian rupee, 2025’s worst-performing currency.
In less chaotic times, a weak baht might be a boon for Thai exports and tourism. Not when global commodities prices are on a tear. With the Strait of Hormuz effectively closed, investors are bracing for how surging oil and fertilizer costs will soon send food prices sharply higher, too.
In the Philippines, President Ferdinand Marcos Jr declared a national energy emergency. Elevated oil prices and a weaker Philippine peso are a “double whammy that will double inflation in the coming months, hitting millions of poor Filipino families the hardest,” said the IBON Foundation, an advisory group.
Thai equities have seen at least $1.2 billion of outflows this month, the biggest movement since February 2023, according to Stock Exchange of Thailand data. Global funds have sold nearly $800 billion of Thai bonds in March, Bloomberg reported.
“Perceptions that the government is not handling the current economic situation effectively are adding to investor concerns,” said strategist Jitipol Puksamatanan at Finansia Syrus Securities.
Signs of stress are popping up all over Asia. South Korea is imposing oil price caps as the won trades near its lowest-ever exchange rate. The won, down 4.4% so far this year, is changing hands near the lowest since the 2008 global crisis.
In Japan, Prime Minister Sanae Takaichi’s government is considering subsidies to mitigate the knock-on effects of surging commodity prices across sectors. Tokyo is conducting a thorough review of the oil-related product ecosystem. With the already weak yen down another 2% this year, Japan is bracing for an intensifying inflation spike.
“The conflict in the Middle East is scrambling the outlook for commodity prices and growth, a fresh jump in consumer price inflation is a significant risk,” Stefan Angrick, a Japan economist at Moody’s Analytics, said.
Oil and gas prices have surged, which could drive a jump in energy prices from March. “A renewed slide in the yen exchange rate is an added concern,” Angrick said. “For now, the uncertainty the conflict has created will keep the Bank of Japan on hold. Subdued wage growth strengthens the case for patience.”
Economist Richard Katz, who publishes the Japan Economy Watch newsletter, added that “the Iran war confuses the picture,” for BOJ Governor Kazuo Ueda. “Both the nominal and real wages this year depend on how much the Iran war adds to overall inflation and reduces income at small and medium-sized companies, where most people work,” Katz noted.
Also confusing the picture, the one-two punch from Trump’s tariffs and fallout from the Iran war has major central banks swinging into tightening mode. Rather than easing in 2026, expectations are now that the Fed’s next move could very well be a tightening. The same goes for the European Central Bank and Bank of England.
“The evolving conflict in the Middle East has human and economic costs for the countries directly involved, and will test the resilience of the global economy,” the OECD said.
The bigger risk, noted Ben May, director of global macro research at Oxford Economics, is that “if things like the shortage of fertilizers and the higher energy costs push up things like food prices, but also perhaps the price of some other energy-intensive goods and services” that currently aren’t on investors’ radar screens.
Nor can China avoid the economic fallout to come. While there are a number of ways in which Xi Jinping’s Communist Party is benefiting from Trump 2.0 – including appearing like the more stable economic partner – Asia’s biggest economy can’t avoid the fallout.
“China might be more resilient, but China is not resilient to a demand shock,” said Denis Depoux, a global managing director at consultancy Roland Berger. “For example, if the economy is slowing down in Southeast Asia, if people stop using their cars because the government is asking them to work from home or they cannot afford to buy gasoline, then it would have an impact on Chinese refiners.”
Not that Washington should take the dollar’s current safe-haven boom for granted. Recently, economist Steve Hanke, who became something of a celebrity amid the Asian crisis, pointed out that new US Treasury data show the US is “insolvent.”
Johns Hopkins University’s Hanke made a name for himself advising then-Indonesian dictator Suharto on creating a currency board to stabilize the rupiah. Now, Hanke is making waves warning about the stability of US finance.
Looking at the Treasury Department’s latest balance sheet report, Hanke points out, Washington has $6.06 trillion in total assets against $47.78 trillion in total liabilities.
It means, as Hanke wrote in a March 23 Fortune magazine op-ed: “The US government is insolvent. That’s not hyperbole — it’s the conclusion drawn directly from the Treasury Department’s own consolidated financial statements for fiscal year 2025, released last week to near-total media silence.”
The more Trump’s policies put the US’s credit rating at risk, the more the dollar could be at risk of plunging. That would be a whole other challenge for Asia, particularly as US government bond yields skyrocket.
For now, though, it’s the dollar’s runaway strength and surging oil prices that are putting Asia at risk. And there’s no sign that the outlook is about to change as long as the Iran war continues to disrupt oil flows.
M A Hossain
It is a familiar American instinct, visible from the early days of the Gulf War to the opening phases of the campaign against ISIS. Air power promises disruption without entanglement, but history shows such bombing campaigns rarely deliver resolution.
That pattern is reappearing in the current US confrontation with Iran. Airstrikes have killed political leaders and degraded elements of Tehran’s missile and drone infrastructure, but those strikes have not defeated Iran’s regime.
Iran developed a decentralized strategic posture specifically to withstand such a military campaign. While Trump’s strikes have often been tactically successful — hitting naval and air assets — Iran has so far sustained its ability to launch missile attacks against adversarial neighbors that host US bases and selectively block shipping through the Strait of Hormuz.
This is the moment when policymakers in Washington have started asking themselves the question they no doubt had hoped to avoid: If bombing does not achieve regime change, what will?
The answer, already suggested by Donald Trump and seen in recent troop movements, is as old as war itself: boots on the ground. Not necessarily divisions marching on Tehran, at least not yet, but perhaps instead an invasion of Kharg Island, an offshore terminal situated 25 kilometers off Iran’s coast through which 90% of its crude oil exports pass.
The first step down the boots-on-the-ground path is almost always framed as a limited operation or surgical mission. Navy SEALs, Delta Force, Green Berets — such specialized units have long been a seductive middle ground for policymakers and military planners.
They are militarily more flexible and politically more palatable than full-blown conventional deployments. Mission failures, when they occur, can be more easily contained — at least in theory.
But theory has a habit of colliding with ground reality. The shadow of Operation Eagle Claw — the US military mission that catastrophically failed to rescue 53 embassy staff held captive by revolutionary Iran on April 24, 1980 — still lingers darkly in American strategic thinking.
The lesson was not simply about operational risk; it was about political fragility, as the failed operation contributed to President Jimmy Carter’s downfall at the polls. Iran today presents Trump with an even more complex target set. Its nuclear program, a key target of Trump’s Operation Epic Fury, is dispersed, hardened and well-hidden.
A raid to seize enriched uranium would risk a repeat of the multi-staged, fatally flawed Operation Eagle Claw. There are other possible special operation options, including sabotage of key facilities, including on Kharg Island, top commander assassinations and providing material support to underground dissident networks.
If escalation continues, before or after Trump’s vow not to bomb Iranian power plants until at least April 6, the next phase of the war employing troops on the ground will be far harder to contain. Limited territorial operations, particularly along Iran’s coastline, are a plausible next step.
This week’s deployment of Marine Expeditionary Units to the Persian Gulf is not yet a declaration of intent to invade. Rather, it is a signaling of capability while talks are supposedly ongoing behind the scenes. The MEU’s roughly 2,500 troops, amphibious ships and rapid-insertion forces are tools designed for controlled escalation.
Iran’s blockade of the Strait of Hormuz is another possible boots-on-the-ground target. Controlling nearby islands – Qeshm, Kish and Abu Musa – would potentially loosen or even break Iran’s hold on the crucial waterway.
Yet geography cuts both ways; Iran’s coastline is not defenseless. It is layered with radar systems, mobile missile batteries, and naval assets designed for asymmetric warfare. The US would bring superior technology; Iran would benefit from proximity. And war-time supply lines almost always favor the defender.
Even a successful US troops landing would not be a victory. Holding the island territory would be a different exercise entirely. The US learned this painfully in the Iraq War, where rapid victory gave way to prolonged occupation and strategic exhaustion under insurgent fire.
There is little reason to believe Iranian territory would be any easier to hold. Indeed, its terrain is harsher, its population is larger and its political structure is already proving more cohesive under external fire than Iraq’s. A US coastal foothold could quickly become a difficult-to-exit liability.
Decisive invasion illusion
Beyond limited operations lies the option few openly advocate but many quietly analyze: a full-scale invasion. It is often the logical endpoint of escalation for military planners.
The comparison with Iraq is unavoidable yet misleading. If the 2003 invasion of Iraq required roughly 200,000 troops, Iran would demand far more —perhaps multiples of that number.
Logistics alone would be daunting. Regional allies, now under Iranian missile fire, would need to provide secure basing and supply corridors. Political consent will inevitably become more uncertain as the war grinds on. US domestic support, fragile even in the early stages of the conflict, would erode as costs in American lives mounted.
Moreover, a long, grinding war in Iran would inevitably shift American attention away from other regions, such as Europe, where deterrence is weak, and Asia, where competition with China will determine America’s long-term standing and prosperity.
Even in the unlikely event of battlefield success in Iran, the aftermath would be the true test. Regime collapse would not equal stability – Afghanistan and Iraq offer sufficient evidence of that.
Iran’s complex ethnic, political and religious dimensions would complicate any US-led attempt at reconstruction. Victory, in such a scenario, would not end the war. It would begin a different, longer one.
There is a deeper asymmetry at work in this conflict, one that no amount of military planning or boots on the ground can resolve. The US seeks clear, measurable and preferably swift outcomes, as reflected in Trump’s blustery claims that the war is already won.
Iran, on the other hand, seeks survival through endurance — a common strategy when states face a far stronger adversary.
This is why the discussion of ground troops keeps returning, despite the risks and despite the history of failure. The US is already seeing that air power can punish, but it cannot compel Iran to surrender.
The debate in Washington is thus not really about whether boots on the ground are desirable; it is increasingly about whether they become unavoidable.
So far, that’s still uncertain. The critical thresholds — economic shocks, direct attacks on US assets and escalation spirals — have not yet been crossed. But they exist, and they are closer than US policymakers seem willing to admit as the war enters its fourth week.
History shows that American wars often expand beyond their original purposes — what starts as a campaign of pressure gradually morphs into a long-term commitment with American soldiers on the ground.
And once that commitment is made, reversal becomes increasingly difficult and costly.
William Pesek
From Thailand to Philippines to
South Korea, Asia is getting crushed between surging oil and a surprisingly
resurgent US dollar
TOKYO — News of currency troubles
in Thailand has a way of raising blood pressure amongst even the most
battle-tested Asian investors.
The threats, of course, come from abroad. As the US-Israeli war in Iran drags on, surging oil is becoming more of a feature than a bug. In Thailand’s case, a heavy dependence on imported crude has traders betting on the implications of additional commodity swings and capital outflows.
Yet exacerbating that is the surging US dollar, which once again threatens to suffocate Asian currencies. This double whammy of risk has governments across the region scrambling to sandbag financial systems as best they can. Back in 1997, the rallying dollar also played an outsized role in the crisis.
That reckoning had its roots in the Federal Reserve’s 1994-1995 tightening cycle. At the time, the Fed doubled short-term interest rates in just 12 months. That extreme tightening cycle, led by then-Fed Chair Alan Greenspan, tipped Mexico into crisis, helped bankrupt Orange County, California, and saw Wall Street bond giant Kidder, Peabody & Co. closing its doors. Then the Fed’s rate hikes came for Asia.
By 1997, the resulting surge in the dollar made it impossible to maintain Asia’s currency pegs. First, Thailand devalued. Next Indonesia. Then South Korea. All three went hat-in-hand to the International Monetary Fund and other agencies for giant bailouts totaling US$118 billion. Though neither sought bailouts, the turmoil also pushed Malaysia and the Philippines to the brink.
Since then, the emerging markets have been very sensitive to the specter of the Fed hiking rates. Case in point: the 2013 Fed “taper tantrum.” Market jitters over mere hints that the Fed might be hitting the brakes prompted Morgan Stanley to publish a “fragile five” list on which no emerging economy wanted to be. The original group: Brazil, India, Indonesia, South Africa, and Turkey.
Now, a surging dollar is complicating Asia’s development plans anew. History’s greatest magnet is luring capital from every corner of the globe, hogging wealth needed to finance budget deficits, keep bond yields stable and support equity markets.
The Iran war has the dollar’s wrecking-ball tendencies bursting back onto the scene. Despite the US national debt nearing $40 trillion, high inflation, and US President Donald Trump’s tariffs, tax cuts and profligate spending, the dollar is rising — against all odds.
The dollar is even outshining gold, the price of which is well off its all-time high of $5,608 per ounce in January. And its rally has currency traders joking that the dollar is the new Bitcoin.
“It doesn’t look like the conflict will end anytime soon,” said strategist Carol Kong at Commonwealth Bank of Australia. “The dollar is king while this conflict lasts. If we’re right about this conflict being protracted, I think oil prices will just keep rising and it will push the dollar higher, at the expense of net energy importers like the Japanese yen and the euro.”
All this could be a clear and present danger for Asia in 2026. For Asia, having commodity prices “go up when their exchange rates are already weak is doubly painful,” said Harvard economist Kenneth Rogoff.
The about-face in the baht demonstrates what’s at stake. After a strong run in late 2025, the baht has fallen to earth as oil prices have surged close to 50% this month. It’s now performing even worse than the Indian rupee, 2025’s worst-performing currency.
In less chaotic times, a weak baht might be a boon for Thai exports and tourism. Not when global commodities prices are on a tear. With the Strait of Hormuz effectively closed, investors are bracing for how surging oil and fertilizer costs will soon send food prices sharply higher, too.
In the Philippines, President Ferdinand Marcos Jr declared a national energy emergency. Elevated oil prices and a weaker Philippine peso are a “double whammy that will double inflation in the coming months, hitting millions of poor Filipino families the hardest,” said the IBON Foundation, an advisory group.
Thai equities have seen at least $1.2 billion of outflows this month, the biggest movement since February 2023, according to Stock Exchange of Thailand data. Global funds have sold nearly $800 billion of Thai bonds in March, Bloomberg reported.
“Perceptions that the government is not handling the current economic situation effectively are adding to investor concerns,” said strategist Jitipol Puksamatanan at Finansia Syrus Securities.
Signs of stress are popping up all over Asia. South Korea is imposing oil price caps as the won trades near its lowest-ever exchange rate. The won, down 4.4% so far this year, is changing hands near the lowest since the 2008 global crisis.
In Japan, Prime Minister Sanae Takaichi’s government is considering subsidies to mitigate the knock-on effects of surging commodity prices across sectors. Tokyo is conducting a thorough review of the oil-related product ecosystem. With the already weak yen down another 2% this year, Japan is bracing for an intensifying inflation spike.
“The conflict in the Middle East is scrambling the outlook for commodity prices and growth, a fresh jump in consumer price inflation is a significant risk,” Stefan Angrick, a Japan economist at Moody’s Analytics, said.
Oil and gas prices have surged, which could drive a jump in energy prices from March. “A renewed slide in the yen exchange rate is an added concern,” Angrick said. “For now, the uncertainty the conflict has created will keep the Bank of Japan on hold. Subdued wage growth strengthens the case for patience.”
Economist Richard Katz, who publishes the Japan Economy Watch newsletter, added that “the Iran war confuses the picture,” for BOJ Governor Kazuo Ueda. “Both the nominal and real wages this year depend on how much the Iran war adds to overall inflation and reduces income at small and medium-sized companies, where most people work,” Katz noted.
Also confusing the picture, the one-two punch from Trump’s tariffs and fallout from the Iran war has major central banks swinging into tightening mode. Rather than easing in 2026, expectations are now that the Fed’s next move could very well be a tightening. The same goes for the European Central Bank and Bank of England.
“The evolving conflict in the Middle East has human and economic costs for the countries directly involved, and will test the resilience of the global economy,” the OECD said.
The bigger risk, noted Ben May, director of global macro research at Oxford Economics, is that “if things like the shortage of fertilizers and the higher energy costs push up things like food prices, but also perhaps the price of some other energy-intensive goods and services” that currently aren’t on investors’ radar screens.
Nor can China avoid the economic fallout to come. While there are a number of ways in which Xi Jinping’s Communist Party is benefiting from Trump 2.0 – including appearing like the more stable economic partner – Asia’s biggest economy can’t avoid the fallout.
“China might be more resilient, but China is not resilient to a demand shock,” said Denis Depoux, a global managing director at consultancy Roland Berger. “For example, if the economy is slowing down in Southeast Asia, if people stop using their cars because the government is asking them to work from home or they cannot afford to buy gasoline, then it would have an impact on Chinese refiners.”
Not that Washington should take the dollar’s current safe-haven boom for granted. Recently, economist Steve Hanke, who became something of a celebrity amid the Asian crisis, pointed out that new US Treasury data show the US is “insolvent.”
Johns Hopkins University’s Hanke made a name for himself advising then-Indonesian dictator Suharto on creating a currency board to stabilize the rupiah. Now, Hanke is making waves warning about the stability of US finance.
Looking at the Treasury Department’s latest balance sheet report, Hanke points out, Washington has $6.06 trillion in total assets against $47.78 trillion in total liabilities.
It means, as Hanke wrote in a March 23 Fortune magazine op-ed: “The US government is insolvent. That’s not hyperbole — it’s the conclusion drawn directly from the Treasury Department’s own consolidated financial statements for fiscal year 2025, released last week to near-total media silence.”
The more Trump’s policies put the US’s credit rating at risk, the more the dollar could be at risk of plunging. That would be a whole other challenge for Asia, particularly as US government bond yields skyrocket.
For now, though, it’s the dollar’s runaway strength and surging oil prices that are putting Asia at risk. And there’s no sign that the outlook is about to change as long as the Iran war continues to disrupt oil flows.
M A Hossain
Bombs have degraded Iran’s
military but not broken its will, shifting US ground war option from
unthinkable to likely
Wars often begin with confidence
in distance — through precision strikes, remote control and minimal personnel
exposure.It is a familiar American instinct, visible from the early days of the Gulf War to the opening phases of the campaign against ISIS. Air power promises disruption without entanglement, but history shows such bombing campaigns rarely deliver resolution.
That pattern is reappearing in the current US confrontation with Iran. Airstrikes have killed political leaders and degraded elements of Tehran’s missile and drone infrastructure, but those strikes have not defeated Iran’s regime.
Iran developed a decentralized strategic posture specifically to withstand such a military campaign. While Trump’s strikes have often been tactically successful — hitting naval and air assets — Iran has so far sustained its ability to launch missile attacks against adversarial neighbors that host US bases and selectively block shipping through the Strait of Hormuz.
This is the moment when policymakers in Washington have started asking themselves the question they no doubt had hoped to avoid: If bombing does not achieve regime change, what will?
The answer, already suggested by Donald Trump and seen in recent troop movements, is as old as war itself: boots on the ground. Not necessarily divisions marching on Tehran, at least not yet, but perhaps instead an invasion of Kharg Island, an offshore terminal situated 25 kilometers off Iran’s coast through which 90% of its crude oil exports pass.
The first step down the boots-on-the-ground path is almost always framed as a limited operation or surgical mission. Navy SEALs, Delta Force, Green Berets — such specialized units have long been a seductive middle ground for policymakers and military planners.
They are militarily more flexible and politically more palatable than full-blown conventional deployments. Mission failures, when they occur, can be more easily contained — at least in theory.
But theory has a habit of colliding with ground reality. The shadow of Operation Eagle Claw — the US military mission that catastrophically failed to rescue 53 embassy staff held captive by revolutionary Iran on April 24, 1980 — still lingers darkly in American strategic thinking.
The lesson was not simply about operational risk; it was about political fragility, as the failed operation contributed to President Jimmy Carter’s downfall at the polls. Iran today presents Trump with an even more complex target set. Its nuclear program, a key target of Trump’s Operation Epic Fury, is dispersed, hardened and well-hidden.
A raid to seize enriched uranium would risk a repeat of the multi-staged, fatally flawed Operation Eagle Claw. There are other possible special operation options, including sabotage of key facilities, including on Kharg Island, top commander assassinations and providing material support to underground dissident networks.
If escalation continues, before or after Trump’s vow not to bomb Iranian power plants until at least April 6, the next phase of the war employing troops on the ground will be far harder to contain. Limited territorial operations, particularly along Iran’s coastline, are a plausible next step.
This week’s deployment of Marine Expeditionary Units to the Persian Gulf is not yet a declaration of intent to invade. Rather, it is a signaling of capability while talks are supposedly ongoing behind the scenes. The MEU’s roughly 2,500 troops, amphibious ships and rapid-insertion forces are tools designed for controlled escalation.
Iran’s blockade of the Strait of Hormuz is another possible boots-on-the-ground target. Controlling nearby islands – Qeshm, Kish and Abu Musa – would potentially loosen or even break Iran’s hold on the crucial waterway.
Yet geography cuts both ways; Iran’s coastline is not defenseless. It is layered with radar systems, mobile missile batteries, and naval assets designed for asymmetric warfare. The US would bring superior technology; Iran would benefit from proximity. And war-time supply lines almost always favor the defender.
Even a successful US troops landing would not be a victory. Holding the island territory would be a different exercise entirely. The US learned this painfully in the Iraq War, where rapid victory gave way to prolonged occupation and strategic exhaustion under insurgent fire.
There is little reason to believe Iranian territory would be any easier to hold. Indeed, its terrain is harsher, its population is larger and its political structure is already proving more cohesive under external fire than Iraq’s. A US coastal foothold could quickly become a difficult-to-exit liability.
Decisive invasion illusion
Beyond limited operations lies the option few openly advocate but many quietly analyze: a full-scale invasion. It is often the logical endpoint of escalation for military planners.
The comparison with Iraq is unavoidable yet misleading. If the 2003 invasion of Iraq required roughly 200,000 troops, Iran would demand far more —perhaps multiples of that number.
Logistics alone would be daunting. Regional allies, now under Iranian missile fire, would need to provide secure basing and supply corridors. Political consent will inevitably become more uncertain as the war grinds on. US domestic support, fragile even in the early stages of the conflict, would erode as costs in American lives mounted.
Moreover, a long, grinding war in Iran would inevitably shift American attention away from other regions, such as Europe, where deterrence is weak, and Asia, where competition with China will determine America’s long-term standing and prosperity.
Even in the unlikely event of battlefield success in Iran, the aftermath would be the true test. Regime collapse would not equal stability – Afghanistan and Iraq offer sufficient evidence of that.
Iran’s complex ethnic, political and religious dimensions would complicate any US-led attempt at reconstruction. Victory, in such a scenario, would not end the war. It would begin a different, longer one.
There is a deeper asymmetry at work in this conflict, one that no amount of military planning or boots on the ground can resolve. The US seeks clear, measurable and preferably swift outcomes, as reflected in Trump’s blustery claims that the war is already won.
Iran, on the other hand, seeks survival through endurance — a common strategy when states face a far stronger adversary.
This is why the discussion of ground troops keeps returning, despite the risks and despite the history of failure. The US is already seeing that air power can punish, but it cannot compel Iran to surrender.
The debate in Washington is thus not really about whether boots on the ground are desirable; it is increasingly about whether they become unavoidable.
So far, that’s still uncertain. The critical thresholds — economic shocks, direct attacks on US assets and escalation spirals — have not yet been crossed. But they exist, and they are closer than US policymakers seem willing to admit as the war enters its fourth week.
History shows that American wars often expand beyond their original purposes — what starts as a campaign of pressure gradually morphs into a long-term commitment with American soldiers on the ground.
And once that commitment is made, reversal becomes increasingly difficult and costly.
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