‘A very strange outcome’: Fareed on US-Iran ceasefire

[0:00] I want to turn now to Freed Zakaria, who is joining me here in the newsroom. [0:04] Are you optimistic about what's happened in the last hour? [0:08] Well, I'm optimistic in the sense that it's a lot better than what Donald Trump was threatening to, you know, [0:14] wipe out, you know, Israeli civilization, any of those kind of broad-based expansions and escalations. [0:22] But, you know, the negotiations here have been a kind of almost a casebook on how not to negotiate. [0:29] So it's not surprising that the ceasefire is fragile. [0:33] You have no actual negotiation going on between the two parties. [0:36] You have no real trust built up between them. [0:40] The last two negotiations the United States was in with Iran. [0:44] It essentially started bombing Iran in the middle of those negotiations. [0:47] So it's not surprising that even though there does seem to be some kind of an agreement, [0:53] it's very fragile and it's probably going to take a while to work out. [0:57] I mean, the president indicating tonight that this is kind of well along on things that possibly could be agreed on. [1:04] It seems like the 10-point plan that Iran has talked about implies Iran control over the Strait of Hormuz, [1:12] not just in this two-week period, but afterward. [1:15] This conflict has shifted from concern over Iran's nuclear program to let's get the Strait of Hormuz open. [1:22] And you don't hear a lot about Iran's nuclear program now. [1:25] So you've hit the nail on the head. [1:27] This is the single biggest strategic shift that's taken place and strategic loss for the United States and its allies. [1:35] What this war has done is handed Iran a weapon that is far more usable than nuclear weapons, [1:42] which is the Strait of Hormuz choking off global oil supplies, essentially disrupting the global economy. [1:49] And what they have realized is they have this weapon. [1:52] They can use it. [1:53] They can turn it on and off without will. [1:55] And anything that institutionalizes it means that at this point, the United States and its Gulf allies are in a sense hostage to Iranian good graces in order to get their product out. [2:09] So could there be a deal in which Iran remains in control of the Strait of Hormuz? [2:13] It seems like Iran will be very reluctant to give up that power and that authority. [2:19] And just to give you a sense of what a big loss this is, Anderson, the United States' first military actions in 1799 were about freedom of navigation, [2:29] the so-called quasi-war with France, then the war with the Barbary pirates. [2:33] That was all about freedom of navigation. [2:35] Since then, the United States has fought for and tried to maintain the principle of freedom of navigation. [2:41] As the global superpower, that has been absolute, you know, we had in 1979, the legislation passed, [2:48] the freedom of navigation program. [2:51] That is what is being given up here. [2:53] The idea that Iran can control one of the key choke points of the world economy is, you know, [2:59] flies in the face of the whole basic responsibility the U.S. had. [3:03] And as you say, this was not an issue for 47 years of tension with the U.S. and Iran. [3:08] Iran never closed the Strait reformers. [3:11] So the United States and Israel have somehow handed Iran a weapon at the end of this that they never had. [3:17] And, and as you said, the nuclear program is not even in the 10 points. [3:21] So if Iran remains, you know, building a nuclear program or the capabilities to have a nuclear device [3:29] and then gets control of the Strait of Hormuz, they would end up in a better situation than they were before this. [3:34] Right. [3:34] So they have then the two, the nuclear stockpile, which they have, they have this, this maritime position of power. [3:42] But remember, they're also proposing in, in, and Iran's parliament has passed legislation to this effect to charge $2 million per ship. [3:51] So the number of ships that normally cross the, the, the, the Strait reformers is about a hundred. [3:55] You do the math and JP Morgan has done the math. [3:58] That is $90 billion of additional revenue for Iran on top of about 50 to 60 billion in oil revenue. [4:05] It's a lot of ballistic missiles. [4:06] All of a sudden Iran is, I mean, after Saudi Arabia, the richest country in, in, in the Middle East. [4:11] And so you've, you've taken an Iran that was weak, contained, its nuclear program shattered, and you've given it control of the Strait, enormous new revenue flows, and the nuclear stockpile. [4:25] It's a very strange outcome. [4:27] So much for the art of the deal. [4:29] Militarily, where are we when you look at the temporary ceasefire and who's in charge of the Strait of Hormuz? [4:36] Well, right now, it seems like Iran holds all the cards for the Strait of Hormuz still. [4:42] And they have said in a very carefully worded statement that they will allow for some passage through the Strait with technical limitations. [4:52] So essentially saying who they allow, what they allowed to go through, and that the Iranian military is essentially determining that. [5:00] So it seems like Iran is very much in charge of the Strait. [5:02] But militarily, I think we are exactly where we've been. [5:06] The United States has said that they've managed to do a lot in these high-volume strikes. [5:11] But Iran has managed to do a lot with relatively little. [5:14] And we're sort of at this precipice where there's been a cessation of hostilities for now. [5:19] But those could flare back up at any point in time. [5:22] And Israel is the wild card with Lebanon could be the start of that potentially flaring back up. [5:27] Yeah, go ahead. [5:28] I want to add one thing to that, too. [5:30] One of the things that we are seeing is that Iran is going to be charging a $2 million per tanker tax. [5:36] Well, we know that's what they want. [5:38] That's what they want. [5:38] We don't know where this is going to go. [5:40] And this off-ramp, I was calling it an off-ramp because the president said this is a starting point. [5:45] It's not like he's accepted what some would consider maximalist demands from Iran. [5:50] Yeah, but if this goes forward, this would be a toll booth that is split with Oman on the other side of the strait. [5:58] But could potentially be delivering Iran a billion dollars of new revenue per week that would be directly translated into oil prices going forward. [6:08] So this is a situation where it's, I think, not just sort of where we were, [6:12] but a substantially worse position for the global economy than we were two months ago. [6:19] Which is where a lot of the questions are now. [6:22] If you don't mind, David, I want to play for the audience one more time J.D. Vance, [6:25] because he's in Budapest supporting Viktor Orban, but he also is going to be involved in these talks we're learning that Pakistan has helped organize. [6:35] And he, at the start of this comment, and this happened just a few minutes ago, said, [6:40] we have a lot of leverage, the U.S. right now. [6:43] Here he is. [6:43] The president has also shown is that we still have clear military, diplomatic, and maybe most importantly, [6:52] we have extraordinary economic leverage. [6:54] So the president has told us not to use those tools. [6:57] He's told us to come to the negotiating table. [6:59] But if the Iranians don't do the exact same thing, [7:02] they're going to find out that the president of the United States is not one to mess around. [7:07] He's impatient. [7:08] He's impatient to make progress. [7:10] He has told us to negotiate in good faith. [7:12] And I think if they negotiate in good faith, we will be able to find a deal. [7:15] But that's a big if. [7:16] And ultimately, it's up to the Iranians how they negotiate. [7:19] I hope they make the right decision. [7:21] A little bit of historical amnesia there. [7:24] The United States has been using its economic leverage on Iran in an effort to try to resolve [7:31] a series of different issues, but mostly the nuclear issue, for 20 years now. [7:35] It's done sanctions. [7:37] It's done sabotage of Iran's nuclear program. [7:41] It has tried to make sure that the Iranians can't operate throughout the banking systems [7:49] around the world. [7:50] So the Iranians know exactly what the economic leverage is. [7:53] And all those sanctions were in place before the war, stayed in place during the war, and [8:00] they're in place now. [8:01] But I think the main thing to stay focused on here is what has changed now since the war [8:08] started, since those negotiations ended in February and resulted. [8:12] He's implying a lot, you know what I mean? [8:14] And I know you wrote this morning that, you know, Iran has been able to absorb more than [8:19] 10,000 strikes, right? [8:21] It's proved kind of resilient in a way, you're nodding, that militarily that maybe was unexpected. [8:26] But is the U.S. going to talks with more leverage, the way he's describing? [8:33] Did this diplomacy by ultimatum work? [8:37] They are going to the talks with the leverage of having shown the Iranians what an incredible [8:44] pounding can take, as Becca just described before. [8:47] But they're also going without the strait being wide open, which it was on the first [8:55] day of the war. [8:56] Remember, the strait of Hormuz was not the reason we went to war. [8:59] It was a result of the war. [9:01] Okay? [9:02] So you've got to resolve the strait issue just to get back to where you were on February [9:06] 28th. [9:06] Then you go to the president's objectives on the 28th. [9:11] The first one was get all the nuclear material out of Iran. [9:15] It's still there. [9:16] It's exactly where it was before the war. [9:18] The second was greatly degrade or eliminate their missile stocks. [9:22] Well, they've degraded a lot of them through the military strikes. [9:27] But obviously, there's still a good deal there. [9:29] And they continued to do damage until yesterday. [9:33] The third one was get rid of the Navy and the Air Force. [9:37] Check. [9:38] That one's done. [9:38] But then came the regime change part, right, where the president said to the people of [9:44] Iran, step, wait for us to go do this, and then come out and take over your government. [9:50] Well, the fact of the matter is, by negotiating with this government, with what is essentially [9:56] the same regime with different people, he is, to some degree, abandoning that promise. [10:03] That's right.