Trump threatens a “large-scale attack” on Iran, and the global inflation alarm is sounding again

The Zhitong Finance App learned that US President Donald Trump said that he is considering launching a “large-scale attack” on Iran to force Iran back to the negotiation table. This move may further push up energy prices that have put pressure on the global economy. In an interview, Trump said he was “close to making a decision” and that the crackdown would be “stronger than before.” The report quoted him as saying that Iran is not ready to reach an agreement, and “the pain they have suffered is not enough.”

This statement highlights the dilemma faced by Trump — the temporary cease-fire agreement broke down due to renewed fighting, and the Strait of Hormuz was almost blocked. On Thursday, Trump warned on Truth Social that if Iran and the Houthis they support in Yemen attack merchant ships, they will face “significant military punishment.” This week, the Houthis claimed to have launched an attack on Saudi oil tankers, opening up a new front in the midst of a conflict that has already pushed oil prices to break through $100 per barrel and US retail gasoline prices to more than $4 per gallon.

According to foreign media quoting Iranian and Iraqi officials, the Iraqi prime minister brought Trump's cease-fire proposal to Iran, but Iran rejected it on Thursday, and the mediation efforts were once again thwarted. The report said that the details of the plan are still unclear.

The US Central Command said on Thursday that it had launched air strikes for the 13th consecutive night, aimed at weakening Iran's ability to attack merchant ships in the Strait of Hormuz.

A few hours before the US launched the air strike, Trump warned, “From now on, any damage caused to ships, goods, and related matters will be covered by Iranian funds held and controlled by the US.”

Iran's funds frozen in the US are about 2 billion US dollars, while larger funds are stored in other countries and cannot be transferred due to US sanctions — estimates range from 24 billion to over 100 billion US dollars. Iranian Foreign Minister Abbas Alagach stated in an article on the X platform that “the seizure of other countries' assets to pay future unrelated claims is a dangerous precedent.”

Since the joint attack on Iran by the US and Israel in February of this year, the war has entered a new phase of escalation after the cease-fire broke down last month. Although the intensity of the fighting is currently below its peak, Iran has threatened that if Trump fulfills the threat of “destroying a bridge or power plant every time Iran attacks Hormuz shipping”, Iran will attack regional infrastructure, including energy facilities. The Strait of Hormuz, which carried about one-fifth of the world's energy supply before the war, has now been drastically reduced to trickle down.

Houthis week's actions put another port of the sea, the Strait of Mandé, at risk, and some ships have already taken a detour. However, two Chinese tankers carrying Saudi crude oil have already sailed out of the Red Sea through the strait.

As of press release, Brent crude oil was reported at $99.65 per barrel, while it was as low as $70.14 on July 2. Gold continued its decline to $4030.10 an ounce, and the market anticipated that the Federal Reserve might tighten monetary policy to curb inflation.

Trump agreed to implement a temporary cease-fire last month, citing the risk of a global economic collapse. In the face of growing political pressure ahead of November's midterm elections, the Republican Party is trying its best to maintain control of Congress. Polls show that people don't support the war. The House of Representatives passed a second resolution on Thursday calling on Trump to stop the war, but the resolution was mainly a symbolic act.

Iran's state television reported that the passenger terminal at the Sharancheh port on the Iran-Iraq border was attacked, resulting in two deaths; at the same time, Iran continues to attack US bases in the region, including targets in Kuwait and Jordan.

As members of Iran's “axis of resistance,” the Houthis control large areas in northern Yemen, including the capital Sana'a and the Red Sea port of Hodeidah. Since Israel went to war against Hamas in Gaza in 2023, the group has frequently disrupted Red Sea shipping with drones and missiles. Trump ordered air strikes against the group last year, then terminated the operation after reaching a partial cease-fire.