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The US and Iran have had bitter relations for decades. After the bombs, a new chapter begins

The US and Iran have had bitter relations for decades. After the bombs, a new chapter begins

Yahoo26-06-2025
WASHINGTON (AP) — Now comes a new chapter in U.S.-Iran relations, whether for the better or the even worse.
For nearly a half century, the world has witnessed an enmity for the ages — the threats, the plotting, the poisonous rhetoric between the 'Great Satan' of Iranian lore and the 'Axis of Evil' troublemaker of the Middle East, in America's eyes.
Now we have a U.S. president saying, of all things, 'God bless Iran.'
This change of tone, however fleeting, came after the intense U.S. bombing of Iranian nuclear-development sites this week, Iran's retaliatory yet restrained attack on a U.S. military base in Qatar and the tentative ceasefire brokered by President Donald Trump in the Israel-Iran war.
The U.S. attack on three targets inflicted serious damage but did not destroy them, a U.S. intelligence report found, contradicting Trump's assertion that the attack 'obliterated' Iran's nuclear program.
Here are some questions and answers about the long history of bad blood between the two countries:
Why did Trump offer blessings all around?
In the first blush of a ceasefire agreement, even before Israel and Iran appeared to be fully on board, Trump exulted in the achievement. 'God bless Israel,' he posted on social media. 'God bless Iran.' He wished blessings on the Middle East, America and the world, too.
When it became clear that all hostilities had not immediately ceased after all, he took to swearing instead.
'We basically have two countries that have been fighting so long and so hard that they don't know what the f— they're doing,' he said on camera.
In that moment, Trump was especially critical of Israel, the steadfast U.S. ally, for seeming less attached to the pause in fighting than the country that has been shouting 'Death to America' for generations and is accused of trying to assassinate him.
Why did U.S.-Iran relations sour in the first place?
In two words, Operation Ajax.
That was the 1953 coup orchestrated by the CIA, with British support, that overthrew Iran's democratically elected government and handed power to the shah, Mohammad Reza Pahlavi. The Western powers had feared the rise of Soviet influence and the nationalization of Iran's oil industry.
The shah was a strategic U.S. ally who repaired official relations with Washington. But grievances simmered among Iranians over his autocratic rule and his bowing to America's interests.
All of that boiled over in 1979 when the shah fled the country and the theocratic revolutionaries took control, imposing their own hard line.
How did the Iranian revolution deepen tensions?
Profoundly.
On Nov. 4, 1979, with anti-American sentiment at a fever pitch, Iranian students took 66 American diplomats and citizens hostage and held more than 50 of them in captivity for 444 days.
It was a humiliating spectacle for the United States and President Jimmy Carter, who ordered a secret rescue mission months into the Iran hostage crisis. In Operation Eagle Claw, eight Navy helicopters and six Air Force transport planes were sent to rendezvous in the Iranian desert. A sand storm aborted the mission and eight service members died when a helicopter crashed into a C-120 refueling plane.
Diplomatic ties were severed in 1980 and remain broken.
Iran released the hostages minutes after Ronald Reagan's presidential inauguration on Jan. 20, 1981. That was just long enough to ensure that Carter, bogged in the crisis for over a year, would not see them freed in his term.
Was this week's U.S. attack the first against Iran?
No. But the last big one was at sea.
On April 18, 1988, the U.S. Navy sank two Iranian ships, damaged another and destroyed two surveillance platforms in its largest surface engagement since World War II. Operation Praying Mantis was in retaliation against the mining of the USS Samuel B. Roberts in the Persian Gulf four days earlier. Ten sailors were injured and the explosion left a gaping hole in the hull.
Did the U.S. take sides in the Iran-Iraq war?
Not officially, but essentially.
The U.S. provided economic aid, intelligence sharing and military-adjacent technology to Iraq, concerned that an Iranian victory would spread instability through the region and strain oil supplies. Iran and Iraq emerged from the 1980-1988 war with no clear victor and the loss of hundreds of thousands of lives, while U.S.-Iraq relations fractured spectacularly in the years after.
What was the Iran-Contra affair?
An example of U.S.-Iran cooperation of sorts — an illegal, and secret, one until it wasn't.
Not long after the U.S. designated Iran a state sponsor of terrorism in 1984 — a status that remains — it emerged that America was illicitly selling arms to Iran. One purpose was to win the release of hostages in Lebanon under the control of Iran-backed Hezbollah. The other was to raise secret money for the Contra rebels in Nicaragua in defiance of a U.S. ban on supporting them.
President Ronald Reagan fumbled his way through the scandal but emerged unscathed — legally if not reputationally.
How many nations does the U.S. designate as state sponsors of terrorism?
Only four: Iran, North Korea, Cuba and Syria.
The designation makes those countries the target of broad sanctions. Syria's designation is being reviewed in light of the fall of Bashar Assad's government.
Where did the term 'Axis of Evil' come from?
From President George W. Bush in his 2002 State of the Union address. He spoke five months after the Sept. 11, 2001, terrorist attacks and the year before he launched the invasion of Iraq on the wrong premise that Saddam Hussein possessed weapons of mass destruction.
He singled out Iran, North Korea and Saddam's Iraq and said: 'States like these, and their terrorist allies, constitute an axis of evil, arming to threaten the peace of the world.'
In response, Iran and some of its anti-American proxies and allies in the region took to calling their informal coalition an Axis of Resistance at times.
What about those proxies and allies?
Some, like Hezbollah and Hamas, are degraded due to Israel's fierce and sustained assault on them. In Syria, Assad fled to safety in Moscow after losing power to rebels once tied to al-Qaida but now cautiously welcomed by Trump.
In Yemen, Houthi rebels who have attacked commercial ships in the Red Sea and pledged common cause with Palestinians have been bombed by the U.S. and Britain. In Iraq, armed Shia factions controlled or supported by Iran still operate and attract periodic attacks from the United States.
What about Iran's nuclear program?
In 2015, President Barack Obama and other powers struck a deal with Iran to limit its nuclear development in return for the easing of sanctions. Iran agreed to get rid of an enriched uranium stockpile, dismantle most centrifuges and give international inspectors more access to see what it was doing.
Trump assailed the deal in his 2016 campaign and scrapped it two years later as president, imposing a "maximum pressure" campaign of sanctions. He argued the deal only delayed the development of nuclear weapons and did nothing to restrain Iran's aggression in the region. Iran's nuclear program resumed over time and, according to inspectors, accelerated in recent months.
Trump's exit from the nuclear deal brought a warning from Hassan Rouhani, then Iran's president, in 2018: 'America must understand well that peace with Iran is the mother of all peace. And war with Iran is the mother of all wars.'
How did Trump respond to Iran's provocations?
In January 2020, Trump ordered the drone strike that killed Qassem Soleimani, Iran's top commander, when he was in Iraq.
Then Iran came after him, according to President Joe Biden's attorney general, Merrick Garland. Days after Trump won last year's election, the Justice Department filed charges against an Iranian man believed to still be in his country and two alleged associates in New York.
'The Justice Department has charged an asset of the Iranian regime who was tasked by the regime to direct a network of criminal associates to further Iran's assassination plots against its targets, including President-elect Donald Trump," Garland said.
Now, Trump is seeking peace at the table after ordering bombs dropped on Iran, and offering blessings.
It is potentially the mother of all turnarounds.
___
This story has been updated to correct that the Syrian rebels who came to power after Bashar Assad fled to Moscow had been tied to al-Qaida, not the Islamic State.
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Already the busiest port in the country, LA moved more than 1 million twenty-foot equivalent units (TEUs) in July, an 8.5% increase from a year ago, the operator said on Wednesday. That includes containers entering and exiting its terminals, with loaded imports rising by a similar percentage to nearly 544,000 TEUs. The total volume handled was 14.2% higher than in June. Read more here. Pharma tariffs are likely weeks away, Reuters reports US tariffs on pharmaceutical imports are coming but not imminent, Reuters reported Wednesday, citing unnamed sources. Trump has previously warned duties on the drug industry could reach as much as 250%. Reuters reports: Read more here. US tariffs on pharmaceutical imports are coming but not imminent, Reuters reported Wednesday, citing unnamed sources. Trump has previously warned duties on the drug industry could reach as much as 250%. Reuters reports: Read more here. 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AI boom could help manufacturers adapt to global tariff landscape Mark Bendeich of Reuters details how the confluence of supply chain disruption from Trump's tariff policy and the rise of AI software solutions is leading to increased innovation among manufacturers. Richard Howells, SAP vice president and supply chain specialist, emphasized that the uncertainty surrouding Trump's trade policy is driving the technology push. "That's how it was during the financial crisis, Brexit and COVID," Howells stated. "And it's what we're seeing now." Read more here. Mark Bendeich of Reuters details how the confluence of supply chain disruption from Trump's tariff policy and the rise of AI software solutions is leading to increased innovation among manufacturers. Richard Howells, SAP vice president and supply chain specialist, emphasized that the uncertainty surrouding Trump's trade policy is driving the technology push. "That's how it was during the financial crisis, Brexit and COVID," Howells stated. "And it's what we're seeing now." Read more here. GE Appliances to invest over $3B in US, moving from China and Mexico GE Appliances will move production of its refrigerators, gas ranges and water heaters from China and Mexico, investing over $3 billion to expand plans in five US states. AP News reports: Read more here. GE Appliances will move production of its refrigerators, gas ranges and water heaters from China and Mexico, investing over $3 billion to expand plans in five US states. AP News reports: Read more here. Bessent dismisses China investing in US as part of a trade deal Treasury Secretary Scott Bessent ruled out Chinese investments as part of a US trade deal. When asked if China would offer a multi-billion dollar pleadges like Japan, South Korea and the EU, Bessent said no. Bloomberg News reports: Read more here. Treasury Secretary Scott Bessent ruled out Chinese investments as part of a US trade deal. When asked if China would offer a multi-billion dollar pleadges like Japan, South Korea and the EU, Bessent said no. Bloomberg News reports: Read more here. Tariffs bring in record $27.7 billion in July as Trump calls haul 'incredible for our country' Yahoo Finance's Brett LoGiurato and Ben Werschkul report: Yahoo Finance's Brett LoGiurato and Ben Werschkul report: Xi takes aim at US 'protectionism' in phone call with Lula Leaders of the BRICS nations seem to be in talks. Brazilian President Lula spoke with China's leader Xi after meeting with India and Russia. This outreach comes after President Trump pulled Brazil into his trade war. During the call, China's Xi urged for coordinated efforts against US protectionism. Bloomberg News reports: Read more here. Leaders of the BRICS nations seem to be in talks. Brazilian President Lula spoke with China's leader Xi after meeting with India and Russia. This outreach comes after President Trump pulled Brazil into his trade war. During the call, China's Xi urged for coordinated efforts against US protectionism. Bloomberg News reports: Read more here. Soybean futures fall after Trump extends trade truce with China Soybean (ZS=F) prices fell back below $10 a bushel on Tuesday, after news of the US-China trade truce extension. Traders saw this truce as likely delaying major grain-purchasing deals between the two nations until later this year. Bloomberg News reports: Read more here. Soybean (ZS=F) prices fell back below $10 a bushel on Tuesday, after news of the US-China trade truce extension. Traders saw this truce as likely delaying major grain-purchasing deals between the two nations until later this year. Bloomberg News reports: Read more here. 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BRUSSELS (Reuters) - The European Union could not say when a joint statement on tariffs with the United States would be ready, nor when the White House would issue an executive order on European car import duties, a spokesperson said on Tuesday. The EU and U.S. reached a framework trade agreement at the end of July but only the 15% baseline tariff on European exports had so far come into effect, as of last week. EU officials previously said a joint statement would follow the deal "very soon" along with executive orders from U.S. President Donald Trump on key carve-outs. "It is an agreement that we believe is strong and the best we could have ... Of course, we expect the U.S. to take further steps that are part of this agreement but I don't believe at this stage we can put a timeline on these engagements," the European Commission spokesperson said. Read more here. 'Climate of uncertainty' remains after China-US trade extension Zhou Mi, an expert at the Ministry of Commerce-backed Chinese Academy of International Trade and Economic Cooperation, told Bloomberg that there remains a "climate of uncertainty" despite the latest 90-day pause on additional tariffs enacted by the US on Monday. The Trump administration 'frequently sends out a range of signals, often through its negotiation tactics and public statements — some of which even contradict each other,' Zhou told Bloomberg. 'This creates a climate of uncertainty that makes businesses and markets increasingly concerned about the stability and outlook for economic and trade policies between China and the US, as well as the US and other countries." Average US tariffs on good imported from China currently sit at 55%. Read more here. Zhou Mi, an expert at the Ministry of Commerce-backed Chinese Academy of International Trade and Economic Cooperation, told Bloomberg that there remains a "climate of uncertainty" despite the latest 90-day pause on additional tariffs enacted by the US on Monday. The Trump administration 'frequently sends out a range of signals, often through its negotiation tactics and public statements — some of which even contradict each other,' Zhou told Bloomberg. 'This creates a climate of uncertainty that makes businesses and markets increasingly concerned about the stability and outlook for economic and trade policies between China and the US, as well as the US and other countries." Average US tariffs on good imported from China currently sit at 55%. Read more here. Swiss precious metals group wants 'a formal and binding decision' on Trump gold tariff promise Not everyone is fully satisfied with President Donald Trump's social media statement on not putting tariffs on gold after uncertainty in the bullion market in recent days. "President Trump's statement is an encouraging signal for trade stability," Christoph Wild, president of the the the Swiss precious metals association ASFCMP, stated on Tuesday. "However, only a formal and binding decision will provide the certainty the gold sector and its partners require." Read more here. Not everyone is fully satisfied with President Donald Trump's social media statement on not putting tariffs on gold after uncertainty in the bullion market in recent days. "President Trump's statement is an encouraging signal for trade stability," Christoph Wild, president of the the the Swiss precious metals association ASFCMP, stated on Tuesday. "However, only a formal and binding decision will provide the certainty the gold sector and its partners require." Read more here. China urges firms not to use Nvidia H20 chips in new guidance China has told local companies to avoid using Nvidia (NVDA) H20 processors, especially for government work. This makes it harder for Nvidia to recover billions in lost sales in China and affects the US government's plan to benefit from those sales. This latest move by China appears to be in response to the deal Nvidia and AMD (AMD) made with the US government over the weekend to pay the US 15% of the revenue for AI-related chip sales to China, adding a monetization layer to the Trump administration's tariff policy that has reoriented global trade relationships. In recent weeks, Chinese officials warned several firms against using these less advanced chips. The strongest advice was to keep J20 processors out of government national security projects, both for state-owned and private companies. Bloomberg News reports: Read more here. China has told local companies to avoid using Nvidia (NVDA) H20 processors, especially for government work. This makes it harder for Nvidia to recover billions in lost sales in China and affects the US government's plan to benefit from those sales. This latest move by China appears to be in response to the deal Nvidia and AMD (AMD) made with the US government over the weekend to pay the US 15% of the revenue for AI-related chip sales to China, adding a monetization layer to the Trump administration's tariff policy that has reoriented global trade relationships. In recent weeks, Chinese officials warned several firms against using these less advanced chips. The strongest advice was to keep J20 processors out of government national security projects, both for state-owned and private companies. Bloomberg News reports: Read more here. Japan's Nikkei hits record high on tariff relief, tech rally The Nikkei 225 (^N225) hit a record high Tuesday as easing US tariff fears boosted optimism, led by tech stocks and tariff relief. Bloomberg News reports: Read more here. The Nikkei 225 (^N225) hit a record high Tuesday as easing US tariff fears boosted optimism, led by tech stocks and tariff relief. Bloomberg News reports: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data

Note to critics of the Trump tariffs: This is not the 1930s
Note to critics of the Trump tariffs: This is not the 1930s

The Hill

time29 minutes ago

  • The Hill

Note to critics of the Trump tariffs: This is not the 1930s

You could practically hear the cheering on Thursday as critics of President Trump finally got what they've waited months for — some indication that tariffs might (finally!) drive prices higher. Yesterday's Producer Price Index report showed wholesale prices jumped 0.9 percent over the last month, the biggest gain since June 2022. It followed another benign Consumer Price Index report published earlier in the week, making it all the more surprising. But, more than three-quarters of the gain was driven by services price escalation; there was some rise in the cost of machinery and other end goods, but the impact from tariffs was inconclusive. Here's a fact: No one — not Fed Chairman Jay Powell, not Goldman Sachs' CEO David Solomon, not Paul Krugman, who predicted markets would collapse if Trump were elected in 2016, nor all the talking heads on Bloomberg and elsewhere who have blasted Trump's tariff regimen — has any idea how his upending of global trade terms will turn out. There has never been a country that dominated the global economy as the U.S. now does, nor has there ever been a president like Trump determined to take advantage of that clout. Many have compared his tariffs with the stiff duties imposed by the Smoot-Hawley Act of 1930, but there are huge differences between then and now, which may account for some of the unrelenting negativity about the president's program. Today, unlike then, the U.S. is the essential nation for producers of consumer goods. Americans spent $20 trillion last year, compared to $10 trillion by residents of the European Union and $8 trillion by Chinese citizens. Though the U.S. accounted for a larger share of global GDP in 1930 than it does today (35 percent vs. 26 percent), we were not the primary buyer of other countries' goods. In fact, in 1930, the U.S. enjoyed a trade surplus; last year, the U.S. had a net goods trade deficit of $1.2 trillion and an overall (including services) trade deficit of $918 billion — a record. Consequently, we have not seen countries retaliate against the tariffs imposed by the president as they did in the 1930s. The Smoot-Hawley tariffs averaged 59.1 percent on some 20,000 different categories of goods. In response, as the Foundation for Economic Education recalls, 'An outraged Canada slammed tariffs on goods that accounted for 30 per cent of American exports. France, Germany and the British Empire followed suit, either turning to alternative markets or developing substitute manufacturing that would replace goods previously acquired from America — or elsewhere, since many other countries were erecting wall-of-death tariffs.' This time, at least so far, there has been remarkably little of that retaliatory tit-for-tat. Some countries best positioned to punch back, like Canada, whose economy is inextricably integrated with that of its southern neighbor, have backed off threats to do so. Three-quarters of Canada's exports are to the U.S., and exports account for a hefty 34 percent of the country's GDP. A recent threat to slap U.S. tech companies with a heavy new tax vanished as Canadian officials tread carefully, hoping to eliminate the 35 percent tariff on Canadian imports not covered by the USMCA trade agreement, as well as a 50 percent tax on aluminum and steel imported from Canada. Otherwise, China is the most obvious hold-out to Trump's tariff regimen. Because of its grip on rare earths that are essential to U.S. manufacturers, and because it supplies a huge amount of cheap goods to American consumers, Beijing has serious leverage over the United States. Like Trump, they are willing to use it. Still, China's economy is struggling and President Xi Jinping must know that playing hardball with Trump will eventually be a losing game. 'Between 1929 and 1933,' the Foundation for Economic Education continues, 'U.S. imports collapsed by 66 per cent. Exports plummeted by 61 per cent. Total global trade fell by a similar amount.' Some consider the global depression responsible for much of the drop; others blame tariffs. Many economists and analysts today say that history should serve as a warning against the measures being enacted by Trump. The critics have relied too much on that historical comparison. In addition, political animus has driven liberal pundits to take (and promote) the darkest view imaginable about Trump's program. So far, most have been wrong. For months they predicted that tariffs placed on imports would drive inflation higher; they haven't. They predicted that the duties placed on imports would crush growth and lead to a recession. With consumer spending steadily advancing, according to credit card data, those dark days have yet to appear. Democrats are positively hoping for disaster. Trump ran on a platform of wrestling down Joe Biden's inflation; his adversaries are hoping he will fail, and they see tariffs as the likely agent of his failure. Bloomberg, MSNBC et the others have enthusiastically promoted the direst of predictions month after month, anticipating each new release of inflation data with the eagerness of kids waiting for Santa Claus. While glumly reporting month after month of weaker than expected inflation, the merchants of gloom inevitably add a '… yet.' They are positive that any minute now the tariff damage will blossom. They may be right; tariffs will almost surely boost prices, but the impact should be modest (after all, imports are only about 11 percent of our economy). At some point the pontificators will have to reassess their assumptions about how businesses and consumers will adapt to the higher duties. Many companies are scrambling to change their sourcing to avoid tariffs, and Americans are navigating around the price increases where possible. The end game for Trump is bringing more manufacturing to the U.S., beefing up industries essential to our security — like steel — and earning significant revenues as a valuable byproduct. How this all plays out is uncertain, but that Trump is committed to all three goals is not.

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