The Munk Debates Podcast - Friday Focus: Trump has no good options in Iran and the NDP leans into left-wing populism

Episode Date: April 3, 2026

While Trump made public statements this week about bringing the war to an end soon, there is significant troop movement in the Middle East suggesting the opposite. There is no telling what comes next, and there is no path to opening up the Strait of Hormuz without a huge escalation. Iran now has control over the Strait and who passes through, benefiting their allies and America's adversaries. Meanwhile higher energy prices won't go away when the war stops and if we get another dose of inflation - which tends to fuel political radicalization - can the centre hold? In the second half of the show Rudyard and Janice turn to the NDP and the election of Avi Lewis as the new party leader. He is moving the NDP further left, promising free public grocery stores and transportation. What is the appetite in Canada for this kind of hard-left politics? Can Lewis excite the public with the same energy that propelled Zohran Mamdani to victory in New York City? And are we underestimating the combination of Avi Lewis and his wife Naomi Klein as a powerful political force capable of reworking the NDP into a populist party? 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.

It's very concerning that the president would discuss these as options in the kind of, frankly, flip way that he did. And there isn't a government in NATO or in the Gulf who listened to that speech does not have concerns. Welcome to the Friday Focus podcast for the 3rd of March 2025. I'm Roger Griffiths chair of the Monk Debates joined by my wing lady. Can I call you that, Janice? Is that okay? Yeah, anything is fine. But you're in these days, by the way.

When people ask me, I say anything but a four-letter word is welcome. Let me just often wish everybody a good Easter celebration. And we're also in the middle of Passover. That's right. Holiday weekend. And what in the Jewish community do we say as a greeting for Passover? Is there a shout out? Yes, there is.

It's translated as happy holiday. Because it's actually one of the few positive stories. Because it's a liberation story. Right. And so it's an upbeat holiday. But then just to finish the analogy, you eat flatten bread with no yeast because freedom comes at a price.

And Christian celebrating the resurrection of Christ and all of it tied to, I think, the seasons and the birds that are finally chirping on my lawn and the inevitable turn of winter to spring. It's fantastic. It is. It is so encouraging. I woke off to the same sound this morning. I thought there's hope. Yeah, it was the first day I kind of heard the birds back. So some things in the world are happening as they should. Unfortunately, Janice, on this show, we have a responsibility, including convening on a holiday. So thank you for your time today to talk about this unfolding crisis in the Middle East. A lot of different directions to go on. But let's just catch up since we last talked a week ago. We've seen the president give a speech from the White House a primetime address.

I think it's fair to say if the war hasn't escalated, it certainly hasn't de-escalated. And you might even say in the last 12 to 18 hours, it's escalated again with the Americans bombing Iran's largest bridge. I guess maybe it has a military application, but it certainly kind of looks like civilian infrastructure under attack. And I believe today, Friday, a Kuwaiti refinery struck by a drone and a promise

from Iran on the basis of this American attack on its public infrastructure to attack American data centers and other American infrastructure in the region. So we believe that is ongoing today Friday. So Janice, where do you see us at in the escalatory cycle? And then let's jump back to the president's address and what the heck we were supposed to make of that. Yeah. I think you're right that the signals go both ways. It's so paradoxical, in the middle of war to signal that you're going to end the war. So when you do that by definition, and you put a time limit on it, no matter how they can hate it is, you're signaling two things, de-escalation,

but you're also seeding coercive power, frankly, because it's just a message to whoever you're finding. Just wait a yet. And so I think that would say we're in a de-escalatory phase. We will, and certainly we're seeing things of the kind you described, but they're not on the order in the scale. escalation, it would be serious. However, again, keeping our eyes on the ground, we have significant droop movements into the Middle East still, and these are strike forces that are going in,

particularly the 82nd airborne, where the leading edge, the sharp end of the spear, as we say, is now there. Others are on their way and will be there in the next two weeks and the whole story of this administration right there thus far has been when they move forces into the theater those forces get used so both are real possibilities at this point and you can't tell anything let's jump back to the president's address on wednesday evening from the white house it's It's come under a lot of criticism, people indicating that, I guess here I can extend my food analogy.

Maybe it wasn't a taco, but a nothing burger. And that there were elements of the delivery, which I think concerned a lot of observers, that it wasn't simply that there was a failure to restate clearly the objectives of this war or how and when they would be assessed to have been achieved, what the next step. would be that big questions were thrown into doubt. And let's focus on the Strait of Hermes. The president had some strange language about allies, NATO members, Europe, others, cherishing the straits, holding it tight if they needed to,

going to the straits and going to the Gulf and taking the oil that they needed you know, this is a critical global choke point, not just for oil, but for basically our globalized economy. Everything from helium in the manufacturing of AI chips to liquefied natural gas that powers manufacturing in Asia and Europe. It can't be more serious than this, Janice. And I guess what I'm trying to understand is what does it mean for the rest of us now to cherish the Straits of Hormuz. Could you, could you translate that for us? That was an incoherent statement as part of a larger incoherent speech. And that's why the speech has been the object of not only so much criticism, but concerned, frankly, as a speech from a wartime leader.

let's just unpack what that means go ahead and find some delayed courage and seize the straits and take the oil. I mean, that was fundamentally the message. There's no military option to do that other than to bomb Iran up and down the coastline where there are two kinds of missiles. There are missiles that are emplaced, and most of those have found, but they're missiles that are hidden, mobile, in underground caves that you roll out, and the distances are so small. So a determined Iran can use drones, and drones are very damaging. You don't need very sophisticated missiles. You can use drones, and one drone can sink a tanker. A few drones can do a lot of damage to any naval vessel. So frankly, right now, there is not a military solution to opening up that straits,

other than a massive escalation, which does not look likely. Huge discussion, let me just say this, about occupying Carg Island. Carg Island is north of that choke point. you can occupy it for sure with an expeditionary naval force, but you can't defend it against drone attacks. And it's not a very large piece of real estate, frankly. So almost all of this has, to me, at least as I look at these options, these options are not grounded in any kind of reality.

And it's very concerning. that the president would discuss these as options in the kind of, frankly, flip way that he did. And there isn't a government in NATO or in the Gulf who listened to that speech does not have concerns. Yeah. And I think, Janice, what I don't understand is that there is a big strategic dimension now to the president, in a sense, conceding. that the United States will not be unilaterally opening the straits. And I guess what I'm concerned about Janice is that I don't think it's an understatement to say that the country that does successfully open the straits will in a sense,

if not own the 21st century, will have shown that an American era stretching back to World War that had as one of its fundamental tenants or covenants, undertakings was the navigation of global sea lanes and the movement of goods and trade under both the auspices and potentially the threat of U.S. military action to keep those global trade routes open. And I guess to put a not so fine point on it, what I'm concerned about her, Janus, is what if in the coming weeks or month or whatever period of time, it's China who reopens the straits of primates. China has very close relations with the Gulf countries. They do an incredible amount of trade with China. China also, unlike the United States, has very good relations with Iran. They, including military cooperation.

They are largely responsible for a lot of Iran's missile technology. It's rocket fuel. Any future that this regime has in Iran will rely on its access to China's manufacturing base and China's basically patronage. So I'm concerned here, Janice, that the president is making not just simply a regional blunder in the Middle East, one that could set. back, albeit a lot of American credibility and goodwill with allies around the world stretching from the Gulf to Asia to Europe.

That's all bad enough. But what if he is handing China a much bigger geostrategic win here? I like your thoughts on that. And then I have one other detail to contribute to this argument as to why this could really become very serious for the United States in the years to come if they concede that China is the country will be the nation that reopens the straits of Fremus. So what you're describing whether it is possible because ultimately the straight is going to be reopened by Iran, right? Iran is the one that just controls that gaites that swings open and closed.

And Iran is now saying if you read the same as same message. the Iranians are issued on their news agency, which I do all day long some days. Iran is now seeing the straits are open to everybody's ships, except its enemies, and at the end of those, at that list, of course, is the United States and Israel. Now, why would the Iranians say that? Because that then removes the pressure on them that is coming from particularly the Gulf states who want to export it and from Asian countries. not only China. But it's open in the following way.

Pay it to all. There's a price to go through this waterway. And the toll itself, which people have said, you know, breaks sanctions on Iran. The amount of money is actually not significant, given the order of magnitude of financial challenges that Iran faces.

So I think that's just wrong. But having a capacity to charge a toll, Well, that the country, the charges and collects, controls the trades. So if- But just for me to jump in there just for a moment, because this was my second point. What if Iran says, we want that toll paid in one, not in U.S. dollars? But if China says our tankers are going to get through without a toll because Iran, we're going to help you rebuild your missile program as your primary deterrent against future.

attack? What if China and Iran, not explicitly, but are understood on a de facto basis, to be co-orchestrating and coordinating the policies and procedures around transit of the Straits of Hermos? What does that do to decision makers in Canberra, Australia, to decision-makers? Do decision makers in Seoul, Korea, in Manila, in the Philippines. How do they then look at China, the big geopolitical hegemon in their region, who now can not only threaten them directly with its Navy and with trade and other tools and weapons, but potentially has a kill switch or on the Straits of Hermuz where these very same countries that are most exposed to Chinese influence are themselves now having to be conscious

that China itself has a role in a say in the future of the Straits of Hermos? So the scenario describes is very possible, because effectively we have to understand Iran is now in control of that state, of that straight, makes decisions about who goes through and who doesn't go through, and makes decisions about who pays a toll and doesn't.

There's only one other group that really matters here on the insurance. and reinsurance companies, and they are largely in London, as you know, because even though everybody except the United States and Israel could go through right now, they're not, because they are, the insurance rates are so hot for countries and companies that are shipping through this case. Let's look at China for a second. It was a huge opening advantage for China, but there is this constraint, rather than in the scenario that you just outlined. Chinese have an interest in toll-free international waterways because so much of what they do around the world, their goods.

They're the world's biggest exporter of manufactured goods. They export to 140 countries around the world. They do not support turning what are international waterways, international waterways, because nobody would be heard in the global economy more. than China would be. So I don't think China will associate itself in any way with a toll-based regime through what was previously considered an international waterway. Will they have outsized influence on Iran, which will control the states? Yes, they will because they do two things. They're big, they buy oil from Iran. They're huge buyers from Iran and will continue to be huge buyers. And we'll continue to be a huge

buyers. And secondly, they even recently supplied advanced the kind of fuel that you were needed for its advanced rock treaty. So we are looking at a close relationship. But China will prefer to do this behind a veil. It will not be in the open, right? I think we agree here. It will not be in the open as the manager of the street. Yeah. And I'll just add one more picture. It was really fascinating what's going on. There was a conference yesterday in London. 40 countries came to talk about the reopening of the street, right? And really only two things came out of that conference.

No, no, the planning will be next week. That's the next week of the easiest to actually plan what they'll do. Two things come out of it. One, nothing happens until this war is over. 40 of the biggest, you know, navies and shippers in the world. in historic London, which is the center of that insurance and reinsurers. Oh, we can't do anything until the war is over. What came out of that Congress?

One statement, no tolls. We are opposed to tolls in the streets of Iran, a straits of poor moves, because that puts on marker damp, not only on this international waterway and choke point, but the other ones. What fun? What do with your opposition? Yeah, and the problem,

is a single drone or a single underwater mine, you know, or or underwater mine drone, lots of different applications here, can basically shut this straight down, precisely for the insurance and other other reasons that you just discussed. So this whole thing is hugely asymmetrical. It is one of the, clearly one of the places where, geography has afforded Iran a strategic

capability that even bombing it back to the stone age as the president likes to say it doesn't change that geography. It doesn't change the fact that a single drone launched against a tanker can effectively

a month from now, six months from now, year from now, shut down the Straits of Promos all over again for whatever period of time. I know we have to close this one out, but just before we do, he said, well, he, you know, he would bomb Iran's power industry, right? Well, that is a hollow threat, frankly, because were that to happen, Iran would bomb the energy infrastructure and the power infrastructure and the Gulf, in the Gulf, and it is already bad enough. We are talking about a year or more. That is the most upbeat estimate to restore energy exports to what they were before the war started. If there's any further attack on the

energy infrastructure, the power infrastructure in the Gulf State, being much worse. So that's a whole threat for everybody to understand. Yeah, I wanted to go with you on that topic, actually just before we break with our complimentary listeners and viewers and convene with our monk donors on the back half of today's Friday focus. Two things, James. One, is it maybe not surprising that markets are closed today? So the president feels that he has a license to bomb that bridge and move into bellicose mode for the next 72 hours.

I have every expectation that comes Sunday night or definitely Monday morning before market reopening. he'll be talking again about how great the negotiations are going. And so I want you to comment on that, just this bizarre scenario maybe for the first time in memory where the commander-in-chief, the president of the United States, his entire negotiating stance revolves around market openings and closings and the relative value of the S&P 500 at any one time during the day. Jamie Diamond, the celebrated CEO of J.P. Morgan, criticized heavily this week. But the other thing I just want to mention, I'm trying to understand, Janice, is bombing, maybe even bombing this bridge,

but the president's threat to bomb desalination facilities in Iran, by every understanding of international law and conventions to which the United States is signatory, this would constitute a war crime. Yes. Will American servicemen and women, and more importantly, will generals, because we just saw this week the firing of the general in charge of U.S. military, the Army, we're not entirely sure what the reasons were for that. Would they follow an order like that? When to do so would be by any...

any modest legal analysis of which the military is responsible for conducting operations in ways that convened to the conventions and laws that the United States is a signatory to. Will the U.S. military fall through on that? You know, two really interesting questions. We've never seen a war run in order to, you know, in order. Jamie Don is absolutely right to criticize this in order to manipulate market movements and time to the night before the markets reopen. And that makes the present statement completely incredible record. And I think that's what's happening.

Everybody's just discounting what he says and looking at what's on the ground. The real question to me, and I'm going to buck this one to you, why are markets moving in response to a statement? Nobody else believes them. It's really difficult for me to understand why they have any capacity at all now to move markets. I don't understand why there's not a huge discount factor on Weddy's Hacks. I'm going to bump that one to you just before we close on. The law is very clear. You know, in the U.S. military, there are legal advisors, right?

And you can, commanders can ask. whether in fact an order is complies with international law or not and they can refuse. Now, they can be fired for doing that by their commander in chief, but they can refuse to comply. This is a very, very interesting task, right there. I'm watching it really closely because it's not difficult to imagine, for example, a scenario. Nine months from now, out to the midterms when an order might be issued by the president, which would not be considered legal by the courts. And one of the big questions, does the American military, the leaders of the American military, do they comply with what they know are illegal orders or not? There's no question that international law, commanders are responsible.

This is a decision they have to make independently of what they're told by their command of chief. Yeah. Yeah, just on the market thing, I think two things. One, I mean, markets are sometimes wonderful forecasting machines. At other times, I think, have the attention span of Nat. And I think because of the volume of news flow, I think you have to look at the market as a very short-term pricing mechanism that is trying to input all these contrary signals. And it causes a lot of volatility.

And if you look at hedge fund performance over the last month, hedge funds had some of their worst 30-day performance records going back a number of years, precisely because this volatility is just impossible to manage it. and it extracts a cost. What I don't understand fully is we're seeing, obviously, markets in Europe and in Asia, you know, starting to price in the effects of higher energy costs for longer. The United States less so.

And the resilience of the American market in the context of this war is quite incredible. I mean, yesterday markets basically closed even on a, a day when the war escalated, when oil prices surge, when WTI, the U.S. spot price was, you know, firmly above $100. I don't know. I think it's hard to understand. I think it's hard to understand why, you know, we're not factoring in an inflationary surge through the economy that requires central banks to raise rates,

which in turn increases the cost of capital. Yeah. Especially for, you know, long duration. You know, equities that have all these software stocks that have been punished that have these very, you know, incredible amount of spending, much of which is they've had to borrow to build out these AI data factories. If all that debt cost is going to reset it at, at higher rates.

I don't know. It's impossible to say, certainly beyond my skill or ability to predict what's going to happen next, but I think you, what we've talked a lot about scenario analysis, I think you need to be thinking about different scenarios, not about odds and certainly not about binary outcomes. And I think the scenario that worries me the most is that inflationary.

scenario. I mean, our country across the Western world, just so beaten up after the inflationary surge post-COVID, how that, not just royal financial markets and debt servicing, but our politics and the extent to which inflation is a political radicalizer. And if we get another dose of that on top of what we already got, what was that? Barely 20. 34, 36 months ago. I really wonder if the center holds. Let me give you the last word in this, the public open half of Friday focus.

Listen, I'll share your worries. I think it's inconceivable to me, given that these higher energy prices are not, they are not going to go away after the war stops, which is a short-term problem. We have a much longer-term effect here, Roger. I can't imagine, given how critical, across so many sectors.

You start to show with that, not only oil, but LNG is, that we're not going to have inflation. And frankly, one of the things that is fueled right-wing populist movements across the democratic world has been inflation, which has eroded and really damaged

the middle classes, which are so important to support their centuries. So that's, to me, a hugely important concern, and we're not hearing a lot about it, frankly. I mean, the other issue to me, Roger, just how do we get this disjuncture between what the markets are taking on board and what's happening on the ground? And why are they paying attention and reacting to statements by a president, which every political military analyst now, we frankly are just discounting them.

Yeah. Well, let's say goodbye to our complimentary listeners and viewers. Thank them for joining us for this, the first half of Friday Focus. If you want to join Janice and me on the back half of the show, exclusive to monk donors, lots of different ways to become a donor. You can do this and get a Canadian charitable tax receipt if you are a resident of Canada and support civil and substantive debate in discussion in the public square.

Janice and I are going to talk about the NDP. They elected a new leader. What does this mean for Canadian politics, especially politics on the center left with Abby Lewis and his partner, Naomi Klein, has celebrated progressive activist, taking control of one of Canada's historic political parties. That conversation for you right after this break.