Analysis-Trump's Abrupt Iran Reversal Exposes Limits of His Leverage

Trump's Abrupt Iran Reversal Reveals Limits of His Negotiating Leverage

Assessing the Impact and Risks of Trump's Negotiating Approach

By Matt Spetalnick, David Brunnstrom and Gram Slattery

WASHINGTON, April 8 (Reuters) - Donald Trump's dramatic climbdown from his chilling threat to wipe out Iran's civilization has exposed the limits - and the rising risks - of the U.S. president's typically unpredictable negotiating style.

His decision on Tuesday to back down and agree to a two-week ceasefire – which critics mockingly called another example of “TACO,” or “Trump always chickens out” – marked the biggest step so far toward de-escalating a 40-day-old war that has shaken the Middle East and disrupted global energy markets.

But Trump’s claims of victory over Iran overlooked questions about the effectiveness of mixing maximalist demands, erratic rhetoric and increasingly extreme threats.

Escalation and Abrupt Reversal

Trump went further than ever before on Tuesday morning when he issued a stark warning to Iran via social media that unless it reached a deal “a whole civilization will die tonight, never to be brought back again.”

After a day on the brink, Trump abruptly reversed his threats - which experts say could have amounted to war crimes - and announced a Pakistani-mediated truce agreement just two hours before a deadline he had set for Iran to open the blockaded Strait of Hormuz.

He claimed in his post that the U.S. had "already met and exceeded all Military objectives."

Lingering Challenges for U.S. Policy

Despite Trump's triumphalist language, analysts say Iran is likely to emerge from the conflict as a continuing problem for Washington: militarily weakened but with a more hardline leadership, de facto control over the vital oil-shipping waterway and a buried stockpile of highly enriched uranium.

Trump has touted himself as a master negotiator since his real estate developer days, but some analysts say he can box himself in with his negotiating style and undermine U.S. credibility on the world stage.

"The president was trapped by his own hyperbole," said Jon Alterman of the Center for Strategic and International Studies think tank in Washington. "He could not have destroyed Iranian civilization, and the costs of even appearing to try would have been massive."

Global Perceptions and Strategic Risks

The approach has an added risk - that adversaries including China and Russia become wise to the strategy.

"The surprise value is wearing off," said a Republican lawmaker who had been in contact with the White House on Tuesday night, referring to Trump's habit of making reversals after tough-sounding threats.

White House press secretary Karoline Leavitt denied that Trump had backed down, telling reporters on Wednesday that his language was part of his "tough negotiating style" and that the world should "take his word very seriously."

Extreme Negotiating Positions and Market Reactions

EXTREME NEGOTIATING POSITIONS

Trump has a pattern of taking extreme negotiating positions, only to backpedal.

At times, analysts said, this approach has appeared an intentional strategy while at others it has seemed haphazard, with his aides kept in the dark and the administration rowing back following pressure from financial markets or his MAGA political base.

Trump's change of tack on Iran followed a spike in U.S. gasoline prices and his own slumping approval ratings.

Financial Markets and Political Calculations

The term "TACO" dates to around a year ago, when faced with some $6.5 trillion of U.S. stock market losses in the space of four days, Trump dialed back the hefty tariffs he had announced days earlier at his "Liberation Day" event at the White House.

A few weeks later, he also reversed a separate batch of punitive levies against China.

In both instances, the stock market - which Trump frequently cites as a barometer of his performance - rallied fiercely after his reversals.

On Wednesday, in keeping with the pattern, the S&P 500 index shot up 2.5% following the ceasefire announcement.

Other Foreign Policy Reversals

Trump also pulled back on threats to seize Greenland from fellow NATO member Denmark, and his push to take over war-ravaged Gaza.

While his deadlines for securing a ceasefire between Israel and Hamas in the war in Gaza did bear fruit, his ultimatums for the Palestinian militant group to disarm have gone unheeded.

Instances of Follow-Through on Threats

However, Trump has also issued and followed through on some threats of military action in his second term in ways that go far beyond his 2017-2021 presidency.

In a military operation that followed a massive U.S. naval buildup off Venezuela and heated warnings from Trump, a special forces raid in January led to the capture of President Nicolas Maduro and a more U.S.-compliant leadership in Caracas.

Trump fulfilled escalating threats against Iran when he joined Israel in attacking the Islamic Republic on February 28, even while Washington and Tehran were still negotiating over the Iranian nuclear program.

In question now is whether Trump, despite some tactical military accomplishments, could still fall short of his declared goals, including closing Iran's path to a nuclear weapon. Iran, which has denied seeking a nuclear bomb, still has a stockpile of enriched uranium believed mostly buried underground by U.S.-Israeli air strikes in June.

'Madman Theory' and the Unpredictability Factor

'MADMAN THEORY'

Trump and his aides have long insisted that being unpredictable is a negotiating tactic aimed at keeping opponents off-balance.

"I wouldn’t say he blinked,” said Jonathan Panikoff, a former deputy U.S. intelligence officer for the Middle East now at the Atlantic Council think tank in Washington. “He took Iran to the edge and managed to escape with at least the temporary off-ramp he had been hoping would come.”

Alexander Gray, a former senior official in the first Trump administration and now CEO of the American Global Strategies consultancy, rejected the notion that this had been another example of Trump's TACO tendency and said the heated rhetoric was instead aimed at “escalating to de-escalate.”

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