Trump Cancels Iran Strikes, Says Deal Near — Diplomacy Replaces Military Action
Hours after threatening to hit Iran 'very hard,' President Donald Trump reversed course on Thursday and called off a fresh round of planned military strikes against the country. Trump said negotiations had advanced to the highest levels of Iran's leadership and had received approval from a broad coalition of regional powers, describing the emerging agreement as essentially finalized. He said a naval blockade of Iranian waters would nonetheless remain in place.
The dramatic last-minute cancellation came amid intense diplomatic activity and growing economic alarm. Iran's chief military commander warned that any renewed U.S. attack would trigger a 'more extensive' war than before. The World Bank, meanwhile, cut its 2026 global growth forecast to 2.5% and warned that growth could slow to just 1.3% — the lowest since the COVID-19 pandemic — if energy supply disruptions worsen and financial market stress intensifies. The European Central Bank became the first major central bank to raise interest rates in response to the conflict, lifting its key rate from 2% to 2.25% citing inflation expected to remain elevated through the second half of 2027.
The war, launched in late February by the U.S. and Israel, has already disrupted global shipping through the Strait of Hormuz and sent energy prices surging. Kharg Island, through which Iran exports the bulk of its oil, had emerged as a potential strike target, with analysts warning that any attack on the facility would cause severe and lasting damage to global oil markets. The cancellation of strikes leaves the broader conflict unresolved, with ceasefire implementation talks continuing and the terms of any deal still unclear.
Sources
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