Trump Weighs Iran Strikes as Tariffs Take Effect

The United States is bracing for a potential military conflict with Iran, which could have far-reaching consequences for the global economy and the price of oil. President Donald Trump has warned that he is considering limited strikes against Iran, even as the country's top diplomat says Tehran expects to have a proposed deal ready in the next few days following nuclear talks with the United States.

The tensions between the longtime adversaries have ramped up as the Trump administration pushes for concessions from Iran. The largest U.S. military buildup since the 2003 Iraq invasion is aimed at Iran, and the outcome of a tense standoff could mean the average price at the pump falls to $2.50 per gallon or spikes astronomically to $5 in the case of war, according to geopolitical and energy analysts.

"The stakes are so high," said oil forecaster Dan Pickering, founder of the Pickering Energy Partners consulting and research firm. "The biggest risk to a disruption would be from Iran if they're backed into a corner and have nothing to lose."

The Strait of Hormuz offshore of Iran is a critical choke point, with nearly 20 million barrels of oil passing through the narrow, 104-mile strait every day. Most of the crude oil from Saudi Arabia, Iraq, Iran, Kuwait, and the United Arab Emirates must pass through the strait, making it a key vulnerability in the event of a conflict.

Meanwhile, the Trump administration has imposed a 10% global tariff on foreign goods, effective immediately. The move is an attempt to salvage the president's trade plans after the US Supreme Court struck down many of the levies he imposed last year. The new tariff is set to remain in place for 150 days, although Congress would need to approve any extension.

Detroit's automakers are among those seeking exemptions from the new tariffs, which could add billions of dollars in additional costs to their imports. The American Automotive Policy Council, which represents General Motors Co., Ford Motor Co. and Jeep-maker Stellantis NV, has sent a letter to the White House seeking to preserve a framework that protects them from paying multiple import taxes on vehicles and parts.

In a separate development, OpenAI has forecast that its revenue will top $280 billion in 2030, driven by strong momentum in subscription sales for its AI software to consumers and businesses. The company has also begun testing advertising for certain users, creating a new potential moneymaker.

As the situation with Iran continues to unfold, the global economy is holding its breath. The potential for military conflict and the impact of the new tariffs on global trade will likely have far-reaching consequences for businesses and consumers alike.