The Munk Debates Podcast - Friday Focus: No winners in the Middle East — and Xi warns Trump against falling into the Thucydides Trap

Episode Date: May 15, 2026

Tickets to our May 20th Munk Debate on Foreign Wars taking place in Toronto and featuring Mike Pompeo, Victoria Nuland, John Mearsheimer and Stephen Walt, are almost sold out. Visit https://munkdebates.com/debates/foreign-wars-debate/ to purchase tickets. Rudyard and Janice start today's show by taking stock of how intolerable the situation in the Middle East is becoming. Iran is asserting control over the Strait of Hormuz, while surging inflation threatens to send shockwaves through the global supply chain. Tehran believes it can withstand Trump's blockade longer than he can withstand its grip over the flow of energy. The missing piece of this story is just how dire conditions have become inside Iran, with massive unemployment and the hollowing out of the middle class. How long can the regime survive under these conditions? In the second half of the show, Rudyard and Janice turn to Trump's visit to China this week and Xi Jinping's striking invocation of the “Thucydides Trap” to warn of the dangers of escalating strategic rivalry between the U.S. and China. Yet despite the symbolism and spectacle, the visit produced no major breakthroughs or concrete agreements. Meanwhile, European leaders and much of the Global South are increasingly viewing Xi as a more predictable and stable actor amid the constant disruption and volatility associated with Donald Trump. Checkmate China? Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus. Go to www.munkdebates.com to sign up.Become a Munk Donor ($50 annually) to get 72-hour advanced access to the full length editions of Friday Focus and Munk Dialogues. Go to www.munkdebates.com to sign up. Hosted on Acast. See acast.com/privacy for more information.

This is a competition in who can outlast the other, who blinks first, and throw in a little military combat in order to accelerate the schedule. That's the best way that I can, you know, kind of encapsulate the thinking of Trump around this. Welcome to the Friday Focus podcast for the 15th of May, 2026. I'm Roger Griffiths, joined in the studio by Janice Gross Stein. Hey, Janice, how's it going? It's great because. Yes, spring has finally sprung. Yes, yes. After a very grim and dreary week here in Toronto,

finally temperatures are headed up. And sun. And sun. Temperatures also, unfortunately, seemingly headed up in the Middle East and the Straits of Hermuz and the Gulf region. What did you make of this week? It was certainly a hiatus on the conflict by both Iran and Trump, in its sense, out of a kind of respect for Gilles.

and for China that each country is trying to deal with separately in their own way, that being the United States and Iran. But that summit is now over. In the last eight hours or so, we've heard some more bellicose language from the president. We've heard from Iran's foreign ministers saying, in a sense, they are deadlocked on enrichment. What happens next? You're right to be concerned, Roger, just to provide some local detail.

There are a large number of refueling aircraft that are once again parked at an airport in Tel Aviv. You know, you could make an argument that it's for benign purposes because they're safe there and they're not safe in any base in the Gulf. but there was a very large number on the ground. There's also some cancellation of flights in and out of the region. You don't really get that unless people are getting very quiet warnings. So I think if you just look at the chatter, there's an increased likelihood that Donald Trump may decide

that the only way to break the deadlock is to move back to some sort of kinetic action again. And let me just say, I don't see what it'll accomplish, frankly. It didn't break Iran's resolve the first time. It can't be anything like the pace again, because they don't have the stocks to do it right here. So what the point of another round of violence would be is, frankly, beyond me. We saw this week that Iran seemed to successfully assert more jurisdiction over

the Strait of Hermos. There were a number, almost two dozen tankers that supposedly transited with the authority of the IRGC, the kind of Praetorian Guard that seems to be running Iran right now. It seems the status quo after the first round of, the first round of of fighting Janice is decidedly not in America's favor. So I guess what I'm struggling with is just how intolerable this situation is becoming, both on the ground in terms of Iran seemingly able to exercise, you know, more, more sovereignty, more authority over the strait. And then we saw a really disconcerting inflation print in the United States today,

this week over 3%. Bond markets have reacted. I think the average on long-term G7 debt. The yield is now north of 5%. That hasn't happened since the early 2000s and with our much more heavily indebted economies now and governments carrying way more debt than they did in the past. These Janus are serious issues that require

some form of resolution because if there isn't there are going to be much bigger consequences down the road for six, eight, ten months from now than simply higher prices at the pump. You know, I agree with you that these are serious economic indicators which I think there are there's almost, you know, willful blindness to these indicators. And so how does Iran think about this. There's a lot of commentary, you know, by Iranian bloggers that get, and it's, we're

going to outweigh Donald Trump. We can stand it longer than he can stand. And in the best intelligence estimates, said they could keep going for another three to four months before they cause structural damage to their world field, and then that's a whole different ball game.

So, I think Trump probably thinks he can too, because we're We were May, June, July, August, people turn away during the summer. The people who want this to go on are saying you can hold out because the inflation, the macroeconomic indicators, it takes a while, as you know, for inflation really to diffuse through the economy other than gas prices. The United States is not that exposed to gas prices. Because Asia is already paying a huge price for this. I don't think Trump cares that much about it.

And so this is a competition in who can outlast the other, who blinks first, and throw in a little military combat in order to accelerate the schedule. That's the best way that I can kind of encapsulate the thinking of Trump around this. Yeah, well, I mean, the U.S. long-term debt, 30-year debt was, again, over 5% this week, which many people feel as a critical kind of threshold. And it is no small part because of inflation, the extent to which inflation erodes the value of the underlying currency that that debt is issued in. So these are, I guess, big questions like the full faith and credit of, you know, sovereign governments like the United States,

who, again, are heavily indebted. I just wonder if Iran, even though maybe they haven't felt that there hasn't been significant economic pain levied against the United States, the dashboard of indicators from high gas prices to increase borrowing costs, to the president's falling polling numbers, to the extent to which there are reports now of, you know, consumer spending beginning to contract as people anticipate an inflationary wave coming as food prices are the next, you know, are the next, you know, domino to fall in the rising butcher's bill that this war is incurring for everyone. I mean, do the Iranians, despite how battered their economy is, despite the extent to which

they have lost large swathes of their military capacity, as the president likes to keep reminding us, are they in, if not the catbird seat, do they have the high hand at this moment, given this president's seeming reluctance again and again now for week after week of this ceasefire to break out of what seems like a paralysis of American policy. You know, one day braggadocio and threatening the next day, negotiations are going great, and, you know, I'm confident that we can make a deal. So, like, what is that? And does it reflect, ultimately, an uncomfortable truth, which is that Iran has, up to this point,

if not won this war, has put themselves in a stronger position, ironically, than they were at the start of it? I think there's no doubt that Iran is in a stronger position now after this war than was before United States and Israel launched the attack. There's no question, Rudyard. I think if they were a do-over, they probably would not do what they did. You know, it's – I think the missing piece of this story to some degree is, How bad it is inside Iran right now, okay? I mean, three million jobs gone.

A swath of bankruptcies, the impoverishment of the middle class. And just, you know, as I was talking about the chatter that you sometimes pick up and a cancellation of flights, there are some indications that some people maybe think about going back into the streets in Iran because it's so desperate. So this is a race between losers, frankly. Yeah. And it's only a question. This regime in Iran is run.

It's a Praetorian regime. It is a revolutionary guard regime. And the most hardline elements within the Revolutionary Guard, to think they're going to crack, regard, giving their record. I'd be very surprised. I think this is an enormous gamble to play a game of chicken, which is what they're doing with these guys.

But they cannot keep on for much longer either. But what do they want, Janice? The Iranians? They seem to say, I mean, things that we know are not, I assume, I don't know, are not feasible, which is the complete lifting of all sanctions, the right to enrich, the releasing of, you know, the tens of billions of dollars of frozen funds, the ability to have a say over

the Strait of Framuz and to collect tolls on chips that use waterways in the strait that are closer as opposed to farther from the Iranian shore. I mean, that's a wonderful, wonderful bedtime story to tell yourself as an IRGC senior commander. But, I mean, there must be something between that position and I guess an American position that seems to, increasingly be open to something that sounded very close to what they were about to negotiate before the war began, which was maybe a consortium around enriched uranium in the Gulf, of which Iran would be a participant with the majority of the enrichment happening outside or all of it outside of Iran, with Russia taking Iran stockpiles, et cetera, et cetera. So I got

I'm trying to understand why we're not closer to some negotiation here from the Iranian perspective because they have so much to lose. And arguably, they can bank some real gains already if this war ends tomorrow. Yeah. You know, it's really interesting because the United States could have bank gains before they launched this attack. I didn't. I think the Iranians are close to making the same mistake, that they're over-inflating their own capacity. to hold out, especially if there's further damage inflicted, and they're going to make the mistake of not taking the gains that are on the table. Yeah. You know, and people do this all the time. We know this.

I think there are solutions to the nuclear issues. I think that tougher one, frankly, in the whole basket of things you talked about, is Iran relinquishing the gains that's made in the strait. And you know, there's discussion inside Iran. Again, when you read the vloggers, right? And they're saying, this is our nuclear weapon. Yes. Right.

And they're literally... We don't need a bomb. We don't need a bomb. We've got the street. We can inflict massive damage on the global economy and put the United States in a perilous position. And we can do it any time we want. I think that's going to be the tougher one.

And look, the street of Hormuz is not Iranians. water. There are a whole series of straits, you know, of states. Oman has as a claim. And so figuring out a solution here, it's not impossible, but that I think is the hot spot. How do you get Iran to back off claims that the straight is ours. That's the language they're using. We control the states, and it's $2 million, by the way, for any unfriendly state. Yeah, no Chinese vessels went through. Oh, and others, others. This week in large numbers.

So if you just think about this, Roger, they are letting the tankers of friendly countries through. So you can't say Iran is responsible for the higher oil prices because energy is getting through. but we are on decide whose tankers get through and what price we charge. And the American blockade for whatever set of circumstances didn't seem to work for these Chinese tankers. Well, you can understand why. They were allowed through.

I guess the summit was good timing for these Chinese captains to weigh anchor. Do you think they would ever stop Chinese? I'm not sure they would, frankly. So, I mean, this, though, as we wrap up the segment, goes back to what next? Because if it is another round of American and Israeli bombing, that doesn't solve the Straits of Hermos.

I guess the next military option would be some much more concerted effort to wrestle the strait from Iran, which could involve deploying troops to various islands, shorelines, etc. This, though, Janice doesn't seem to be on the table for all the obvious reasons that it would require

arguably months of occupation and who knows. And body bags. And body bags coming home. Yeah, so that's such a good point. So it's like the president wanted to fight a war but then when he actually had to fight a real war

as opposed to just an air war, that's now off the table. And if the Iranians know that, then what is the incentive for them to come to the table? Well, that's exactly right. Because they're willing to fight a real war. Yes, they are. And they're willing to absorb the punishment. And certainly, I mean, here's the big risk, Richard. If there is renewal of active fighting on the table is the energy structure and infrastructure of all the Gulf of states, that will be targeted. number one, the country that has taken the brunt of Iranian missiles, not Israel, the Emirates, right? And that's what would, the grim picture that you painted at the beginning of this

conversation would pale if there's really structural damage to the energy infrastructure among the Gulf states. So then if we agree that the president has very few, if any, options, then why not just in typical Trumpian fashion? Just walk away, declare victory, recite his litany of the Iranian Navy at the bottom of the Gulf, X number of missile launchers destroyed. I mean, he has a whole kind of patois of faux victory talk that he's quite practiced. Now, why not just walk away, Jess? What's holding him back?

Because we know he's disinterested in the war. he's grown tired of it. He knows it's counter to his political interests. His poll numbers are not looking good, heading to the midterms. Why not just in typical Trumpian fashion? It's everyone else's problem. I'm on to my billion dollar ballroom and Cuba. And Cuba and my golden arc of triumph that I want to erect.

You, you know, everyone else, sorry. but I'm the king. And after me, the deluge. The point a mile deiluge. You know, there's no saying that won't happen, Roger. That's entirely possible that that would happen. So what's holding back? And listen, I think you and I both agree that trying to get inside Donald Trump's head

is ultimately a losing game because we can't. Nobody can really get it done. But Trump, there is one thing that has run through, and it's been a consistent pattern with Donald Trump, he has an abhorrence of nuclear weapons. Yeah. He absolutely does. It's a longstanding thing,

everybody who's ever worked with him knows that about him. And that's a good thing. That's a good thing, right? And he's invested in that Iran will not have a nuclear weapon. And he said it, and I'm working at get that nuclear dust, which it's not nuclear dust, by the way,

but just leave that one aside. That's how he is ultimately defined. the stakes here, right? And he's dug himself in pretty far, and he doesn't have a good explanation. He can't just declare victory if that is left open and there's no progress on that. So I think the challenge is for Ron to move just a little more on that issue to give him a way to say there's progress on that issue. And then he might well do what you're saying. But he doesn't have enough yet on that Yeah. Okay. Well, it could be a consequential weekend. My bet is that he continues to kick the can, but we are running out of time. There's, you know, a fair amount of good evidence that the shut-in of a lot of

this energy production will start showing up in acute shortages, not only in Asia, but Europe. and unless the United States starts banning energy exports, those prices reverberate. And I filled up my car this morning on the way in for the long weekend. It was a bit of a jaw drop. Was it a sticker shock for you? Yeah, I mean, a quarter tank was, you know, 30 bucks or something. And I thought, you know, I remember in the last five years, you know, gas at half this, half this price. And we just have to think that individuals' debt loads are higher.

People are more indebted than they were. They're still scarring from the pandemic. I really feel for people out there who feel the immediate effects of this war just through the inflation of gasoline. Yeah, there's no question. You're right. I mean, I think if there is any renewal of combat, it will make it much worse, Roger. And you can't, you can't.

And by the way, the longer you delay, the more long-lasting the consequences here too. So I hope you're right in this one case. Yeah. That it takes sick. Yeah. I mean, it's all kinds of other, you know, disasters and consequences that would fall out from that decision. Most notably, this trade of removes with a perpetual kind of Iranian dead man switch over it.

You know, I'll just say this, you, above all, will get this. Markets adjust. Yeah, there will be higher prices, but already the Ameranis are building a pipeline. Everybody now recognizes that having Iran control a choke point like that. It's just not a going forward option, and they will find other ways of exporting the oil, some faster, some slower. It'll take a couple of years. But one thing I can guarantee you five years from now, the oil traffic through that street.

will be much less than it is now. They'll have to vie with Iran's ballistic missiles and drone capacity, you know, regardless. And I think it just makes Iran much more central to the whole future of the Gulf in that region in a way that they weren't before. Well, let's say goodbye to our complimentary listeners and viewers. We're going to join our monk donors on the back half of the show. Talk about the Trump-Ghi summit. If you haven't heard about the Thucydides trap,

we're going to go deep into some Greek history. explain. It's a very particular language and wording from President Gia. Kind of shot across the bow. Maybe one that the president didn't fully understand, but we'll make sure that you're up to speed on it after this short break. Thank you for listening to the first half of the Friday Focus Podcast. To get access to the full episode right now, become a monk a donor. You can do that for just $50 a year. That's less than a dollar a week. You also get advanced access to full-length editions of our weekly monk dialogues with Andrew Coyne, exclusive live streams of our main stage debates and all kinds of other great perks and privileges. Simply go to our website,

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