Trump’s ‘Art of the Deal’ Is Unable to Reopen the Strait of Hormuz—and It’s Threatening a Recession

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For nearly 40 years, Donald Trump has honed a singular, aggressive tactic: shifting his losses onto others. This strategy was evident in Atlantic City, where his casino ventures incurred a total of $1.1 billion in losses, underwent two bankruptcies, and saw $1.8 billion in debt restructured or written off, all while Trump reportedly paid himself around $82 million, as detailed by Shawn Tully in .

Trump further refined these methods through numerous bankruptcy filings, utilizing Chapter 11 protection six times for his various businesses and emerging from each collapse with his name still prominently featured. He applied a similar approach to international relations, renegotiating NATO funding, withdrawing from the original Iran nuclear agreement, and imposing tariffs until trading partners conceded. His consistent playbook involved creating turmoil, making others desperate for a resolution, and then capitalizing on the situation.

Now, in the third week of an active military conflict with Iran, Trump has encountered a challenge his entire operational philosophy was not designed to address: a 21-mile-wide maritime chokepoint at the entrance to the Persian Gulf. This strategic passage lacks a CEO to pressure, bondholders to threaten, or shareholders to absorb losses. The Strait of Hormuz is crucial, handling approximately 20% to 25% of the world’s daily oil supply. It cannot be restructured or subjected to bankruptcy proceedings, and currently, it is effectively impassable.

The deal that fell apart

As is often the case with Trump’s dealings, the situation began with a negotiation that soured. Throughout late February, Trump’s representatives engaged in multiple rounds of indirect nuclear discussions with Iran in Geneva and Vienna, insisting that Tehran abandon uranium enrichment entirely. Trump expressed his dissatisfaction with Iran’s stance to reporters, stating that Iranian diplomats were unwilling to make sufficient concessions. This mirrored his typical pattern: exerting maximum pressure, maintaining strategic ambiguity, and dangling a deal only to withdraw it until the other party relented.

However, Iran possessed leverage that Trump had underestimated, unlike the bondholders in Atlantic City. Following Trump’s widely anticipated, yet seemingly ill-prepared, military actions against Iran, in conjunction with Israel, Iranian forces began deploying mines in the strait, launching anti-ship missiles at commercial tankers, and utilizing drones against vessels navigating the narrow waterway. U.S. Central Command destroyed 16 Iranian mine-laying vessels in an effort to clear the passage, but these efforts proved insufficient. Shipping traffic through the strait was severely disrupted, coming to a near standstill. As of Monday, Iran claimed that traffic was resuming through the strait, but only for non-U.S. allies.

When the numbers turn

The economic repercussions materialized more rapidly than most analysts had foreseen. The International Energy Agency announced an emergency release of 400 million barrels from strategic reserves—a rare measure—as the conflict removed approximately 8 million barrels per day from the global supply. Goldman Sachs raised its 2026 inflation forecast by 0.8 percentage points to 2.9% and reduced its GDP growth projections by 0.3 points to 2.2%. In a severe scenario, involving a full month of disruption with crude oil averaging $110 per barrel, Goldman estimated a 25% probability of recession.

These figures were particularly damaging for a president who had campaigned on promises of lower prices and economic dominance. The administration’s attempts at diplomatic pressure, strategic reserve releases, and discreet appeals to OPEC allies failed to yield results. CNBC concluded that “The U.S. is running out of ways to get oil prices down. It is up to the military.” In Trump’s business model, when a deal fails, he seeks a new party to engage with. However, the global energy market does not operate in this manner.

Make someone else pay

Faced with an adversary unresponsive to his usual tactics, Trump reverted to his preferred strategy: transferring the cost to others. On March 15, Trump informed reporters that he had “demanded” that approximately seven countries form a coalition to patrol the waterway, warning of negative consequences for any nation that refused to cooperate with the United States.

This was a characteristic Trump maneuver—a transactional ultimatum, a threat disguised as an offer. However, the reaction highlighted the limitations of his coercive approach. NATO allies rejected the demand outright. China, which continues to import Iranian oil, responded with calculated indifference. Trump suggested the possibility of canceling a summit with Beijing over the issue, but Beijing showed no signs of concern. The dealmaker had presented his terms, but the world declined to accept them.

On Friday and Saturday, U.S. forces conducted strikes on Iran’s Kharg Island, the primary terminal for roughly 90% of Iranian oil exports, targeting 90 military sites in what Trump described as one of the most significant operations in Middle Eastern history. Despite these actions, he acknowledged that Tehran could still deploy drones or utilize mines and missiles in the waterway. The strait remained perilous, and tankers continued to avoid it.

Foreign policy analyst Matthew Kroenig explained the situation succinctly to NPR: “As long as Iran has drones and missiles and continues to fire them, I think many commercial shippers are going to think it’s just too dangerous even with an escort to pass through the strait.” Even after a potential ceasefire, uncleared mines could deter insurers and, consequently, tankers for months. The problem of an unswept mine cannot be resolved through negotiation.

Trump stated he was unwilling to make a deal because “the terms aren’t good enough.” In a business context, this might be seen as leverage. However, in the Strait of Hormuz, it more closely resembles an admission of failure. was always predicated on the assumption that the opposing party would eventually yield due to their strong desire for an agreement. The strait, however, desires nothing; it simply exists—narrow, contested, and entirely unaffected by the reputation of the individual attempting to reopen it.

For four decades, Trump successfully deflected responsibility for his failed ventures onto others. Now, standing at the entrance to the Persian Gulf, with global oil markets in turmoil, allies remaining uncooperative, and Iranian drones still operating over shipping lanes, he is experiencing what his creditors, contractors, and business partners already knew: eventually, all debts must be settled.