Trump’s MOU with Iran: A defeat for U.S. imperialism

It’s only been a short time since President Trump signed a 14-point “memorandum of understanding” (MOU) with Iran that supposedly ends the war that the U.S. and Israel launched on February 28.

“Supposedly” is the most definitive word we can use to describe the agreement, since Trump has insisted that the U.S. wasn’t really at war and has vacillated between threatening genocide and accommodating Iran. What’s more, Israel doesn’t want the war to end. On June 25, Iran attacked a ship in the Gulf, announcing the Strait of Hormuz closed. Within days, the US had struck Iranian infrastructure, and Trump was back to talking about being “forced to militarily complete the job” of overthrowing the Islamic republic.

Still, Trump’s signing of the MOU with Iran marked a defeat for the U.S. For all of the death and destruction it rained down on Iran, the U.S. was surrendering and suing for “peace.” Assessing the “settlement” as a U.S. defeat is hardly a controversial point. A broad spectrum of opinion, from Iran hawks like neocon Robert Kagan to revolutionary socialists consider Trump’s war to be a strategic defeat for the U.S.

The MOU’s terms, which may not ever come to fruition, show a U.S. willing to offer multiple “carrots,” from a $300 billion reparations fund to an end of all economic sanctions on Iran, to induce the Iranian government to lift its de facto closure of the strait through which one-fifth of global petroleum transits. In a move that might also signal a U.S. intention to blunt Iran-China relations, the U.S. agreed for the first time in decades to allow Iran to sell oil for dollars.

The U.S. deferred all its ostensible reasons for the war— “regime change,” Iran’s nuclear program or Iran’s support of regional allies—to an undetermined future, if they are considered all. In diplomatic practice, deferring “hard questions” to future negotiations is often a way of never resolving them.

Not that “resolving” those U.S.-Iran frictions is anything more than U.S.-Israel goals towards a Middle East in which the U.S. is the main global hegemon, while Israel retains its status as the main regional power.

Trump hopes that reopening the strait will get oil flowing again, bring down prices, and redound to his political benefit. But oil analysts have thrown cold water on this scenario. Ships moving through the strait are months away from delivering their oil to market. And the war left major petroleum processing sites, including an important liquid natural gas (LNG) processing site in Qatar, damaged. Qatari authorities said it might take five years to repair the damage from Iranian attacks.

The U.S. has managed to moderate the run-up in gas prices by dumping millions of barrels from the nation’s Strategic Petroleum Reserve (SPR) onto the market. The SPR currently stands at its lowest level since 1983. Countries outside of North America, particularly those in Asia and Africa, have faced even bigger economic disruptions from the war.

Absent a huge escalation in the war that Trump and the U.S. appear not to be prepared for nor interested in, the war has reached a stalemate that is unlikely to change. So, what has Trump’s fiasco in Iran revealed about global politics?

First, it challenges the U.S.’s claim to global hegemon status that rested on its guarantee of petroleum transit out of the Gulf. The U.S., as the world’s largest producer of crude oil, is not dependent on Middle East oil. Yet its traditional allies in Europe and Asia (particularly Japan) and its Chinese adversary depend far more heavily on importing hydrocarbons from the Gulf region. So, the U.S. “blue water” navy’s assumed guarantee of safe passage from the Gulf has been a key lever of power the U.S. has exercised for (and over) its allies and against its adversaries.

With Iran’s closure of the strait and the U. S’s inability or unwillingness to forcibly open the strait, Iran has taken that lever out of the U.S.’s hands. Trump was even reduced to cajoling China and the U.S.’s (former) European allies to send warships to the Gulf to help the U.S. If the real power to control energy flows from the Gulf lies with Iran and Oman—and not the U.S.—then the U.S. has lost a major element of its claim to be a global superpower.

The U.S. will try to replace the leverage it lost in the Gulf with its relatively recent role as top global oil and gas producer and exporter. But after years of tariffs and conflict over regulation, even the European Union is wary of becoming too reliant on the U.S. for energy.

The war also depleted the U.S.’s expensive missile arsenal and forced it to move military assets from the Asia Pacific region to the Middle East. Iran’s drones and missiles, constructed at a fraction of the cost of U.S. weapons used against them, caused serious damage to major U.S. military bases. Iran-backed Iraqi militias drove the U.S. to abandon its Camp Victory in Iraq. The Pentagon may be trying to hide the extent of the damage to its bases in the region.

In other words, this short war against a third-rank military power revealed several underlying weaknesses behind the Pentagon’s façade.

Second, the U.S.’s failure may change the alliances on which its power in the Middle East rested. The U.S.—under both the Trump and Biden administrations—has tried to push the Gulf autocracies into a working partnership with Israel and the U.S. Promising billions in investment, Trump has courted the Gulf petrostates to join the “Abraham Accords” with Israel and against Iran. Rather than accelerate the momentum towards a pan-Gulf alliance with Israel, the war split the Gulf states between the “Abraham” group led by the United Arab Emirates, and a group, led by Saudi Arabia, that is seeking some kind of working relationship with Iran. Already, Iran and Oman are collaborating to extract tolls from ships passing through the strait that borders each country’s territorial waters.

Iran’s attacks on the Gulf states punctured their belief that U.S. protection underwrote their role as global business hubs and luxury playgrounds for the rich. Suddenly, the U.S. presence seemed to invite the “instability” they had assumed away.

No doubt, there will be many twists and turns in the U.S.’s future relations with the region’s petrostates. But it is hard to see their relations resetting to the pre-war status quo. “The new regional order will be defined less by American primacy than by multipolarity, with China an increasingly central player and Iran an integral rather than a marginal actor,” wrote Johns Hopkins international policy experts Narges Bajoghli and Vali Nasr in the July/August 2026 Foreign Affairs.

Third, the war revealed a sharp divide between the U.S. and its Israeli “watchdog.” For decades, Israel has considered Iran to be its main challenger for regional hegemony. Regime change in Iran, or turning the country into a “failed state,” has been one of Prime Minister Benjamin Netanyahu’s obsessions.

Netanyahu opposed all U.S. diplomatic outreach to Iran, including the 2015 multi-lateral nuclear deal with Iran the Obama administration completed. So, the Trump-signed MOU is a real sign of failure for Israel, whose political and military leadership opposes it. For these reasons, Israel has every incentive to try to undo the deal. If Iran succeeds in forcing the U.S. to tie an Israeli withdrawal from Lebanon to a final agreement, then a rift between Israel and the U.S. will open wider.

It’s too early to say if a U.S.-Israel rift will become a permanent divide. Since Israel has been a cornerstone of U.S. policy in the region for two generations, much more will need to transpire for the U.S. to kennel its watchdog. In fact, away from the social media-driven clamor, the Pentagon may be moving to fully integrate Israel into the U.S. military supply chain. Outside of Israeli action that might undermine the MOU, the U.S. shows no interest in stopping the Zionist state’s quest for “Greater Israel” in the West Bank, Gaza or Syria.

Fourth, China emerges stronger from the U.S. debacle in Iran. For the past two decades, any war the U.S. fights that doesn’t involve China (e.g., Iraq, Afghanistan) has tended to weaken the U.S. China gains strength by default. China shrewdly operated to provide Iran with logistical support for its war and facilitated its ally Pakistan’s role in the negotiations that forged a ceasefire and the MOU. The U.S. proved its unreliability (launching the war while still negotiating for peace with Iran) and its amateurishness. China emerged as a stable player on the global stage. This can only help to boost China’s global political strength.

The fact that China has transformed itself into the world’s largest “electrostate” provides another advantage. The biggest shock to the global oil economy in 50 years will impel states to seek alternatives to oil. And those who want to produce electricity from solar, wind or hydropower will come calling to China, the world’s leader in those technologies. While the U.S. under Trump appears to be “doubling down” on the 19^th century fossil fuel economy, China is surging ahead with the energy economy of the 21^st century.

It may be too facile to compare the U.S.’s fiasco in the Gulf with the 1956 Suez crisis, when the U.S. forced Britain, France and Israel to stop their military action against Egypt’s nationalization of the Suez Canel. The 1956 events were a key hinge point showing that the region’s old colonial powers were spent forces, and that the U.S. was the new imperial boss.

The U.S. remains a power, but a diminished one. And whether Iran in 2026 proves to be the U.S.’s 1956, it’s clear that the U.S. no longer can enforce President George H.W. Bush’s command in the run-up to the 1991 Gulf War: “what we say goes”.