Maurice Obstfeld

Historically, throughout the Middle East, throughout the Earth, droughts, shortages of water lead to severe social dislocation.

It's not really surprising that all this

is coming to a head.

The country, the regime have both been under extreme economic and geopolitical pressure, and sometimes you just see these explosions.

Some smaller demonstration can metastasize, not unlike what we saw on a much larger scale in Eastern Europe in 1989.

Again, there were pent-up economic frustrations, pent-up frustrations about corruption, and then you get an explosion.

Well, the administration is also supposedly considering military options.

I'm not clear what those are.

But the tariff has been the all-purpose Trumpian response to –

everything he doesn't like.

So to some degree, I think they get discounted by the markets and even by some of the targets at this point.

You know, the tariffs are supposed to fall on U.S.

imports from countries that, quote-unquote, do business with Iran.

The major trading partners for Iran are China, first and foremost, but also the UAE, Turkey, Iraq.

And we have substantial trade with both Turkey and the UAE.

We've been negotiating trade deals with those countries, as with China.

We depend on Turkey as a regional and NATO ally.

We depend on the UAE as a geopolitical ally in the Middle East.

So the betting is probably that either these countries will cut off trade with Iran, pressuring the regime, which I very much doubt that can happen in a short time horizon, or that these countries will pressure Iran

the Iranian regime to go easy on the protesters, which I also think is not very likely to happen.