The Iran war's global fallout (so far)

The Iran war has had a ripple effect on the global economy and international relations way beyond the Middle East. Kori Schake of the American Enterprise Institute joins Ian Bremmer to discuss how the conflict is redrawing power for the US, Russia, China, and America's allies.

Trump declared Operation Epic Fury over, but the consequences of the Iran war are still very much unfolding. The US is locked in a standoff over the Strait of Hormuz, facing what Kori Schake of the American Enterprise Institute describes as a binary choice: "dramatic escalation" or "humiliation, accepting that Iran is now in control of the Straits and we have sacrificed free passage in international waterways."

Russia and China are both watching and benefiting. Higher oil prices are pumping money back into the Kremlin just as pressure over Ukraine was mounting. And as Trump heads to Beijing for the China-US summit, Xi Jinping holds real leverage. Beijing knows the White House needs its help to stabilize the Strait. Schake says that tells you something: "It's an important measure of just how much President Trump has lost in starting the war in Iran and pursuing it in the way he has, that he's having to go appeal to China, America's most powerful potential adversary, for assistance in delivering us from a problem of our own creation."

For America's allies, the damage is also real, she says. The US has externalized the costs of the conflict onto partner countries, cutting Germany's GDP growth in half through higher energy prices. At the same time, the war has exposed a shallow US defense industrial base and raised hard questions about whether American military power, however tactically impressive, can translate into strategic wins.