Washington: Amid escalating tensions in the Middle East, President Donald Trump's recent statements hint at a potential resolution to the conflict with Iran within weeks. The pressing question remains: why is Trump appearing cautious and anxious about intensifying this conflict? Associate Professor Dr. Sompop Manarangsarn provides an intriguing perspective, emphasizing that the issue at hand is deeply intertwined with "massive investments" linked to the conflict.
According to Thai News Agency, the economic entanglements with Gulf states like the UAE, Kuwait, Qatar, and Saudi Arabia play a pivotal role. These nations have established Sovereign Wealth Funds (SWFs) investing substantial sums in the United States. For instance, the Abu Dhabi Investment Authority holds $1.11 trillion, with a significant portion invested in the US. Similarly, Saudi Arabia's Public Investment Fund has nearly $1.3 trillion in investments, much of it tied to American assets. Collectively, these Gulf nations have funds amounting to $5-6 trillion, with over $2 trillion invested in the US.
Dr. Sompop further explained the potential repercussions if military action were to damage these nations. A "sudden withdrawal of funds" could cripple US capital markets. The stock market, where Gulf funds represent 25% of investments, could face extreme volatility. The bond market, with 17% of these investments, might see plummeting yields, risking the financial sector's stability. Additionally, around $400 billion tied to real estate and private businesses in key areas like New York and Miami could be jeopardized, affecting interests close to Trump and his family.
Moreover, Trump's hesitation is also influenced by significant global business deals. The UAE's $1.4 trillion AI and data center investment and Qatar's $90 billion Boeing aircraft purchase underscore the economic stakes. These deals promise substantial US economic benefits, including job creation, which Trump has touted as vital for American growth.
Complicating matters, Iran has threatened retaliation against major US technology firms, including the "Seven Angels" like Microsoft and NVIDIA. An attack on these companies could have a dire impact on US stock indices, exacerbating the economic fallout.
Dr. Sompop concluded that Trump's reluctance to escalate the conflict is not solely about avoiding military engagement but is linked to the potential economic disaster that could arise from a hasty withdrawal of over $2 trillion in investments. Such an event could thrust the recovering US economy into a crisis beyond Trump's capacity to manage.