Enter the escalation trap

David Llewellyn-Smith

Thursday 16 July 2026

The news for the war is all bad.

Pentagon announces second wave of strikes later Wednesday, the after initial 90-minute attack to start the day.
Trump threatens wider strikes unless Iran returns to talks – says attacks to ‘expand’ next week.
Wednesday saw 5th strait day of US bombardment on chiefly Iranian coastal sites.
Iran hits US-Gulf bases and warns on regional oil exports, says it is in ‘control’ of Hormuz Strait.
No evidence de-escalation: Tehran rejects talks and vows more retaliation.

How long before it closes the Red Sea as well? Professor Robert Pape has seen it all before.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.