Back in early March, speaking to a group of Republican lawmakers and donors who had gathered at his golf club in Doral, Florida, Donald Trump described the Iran war, which he had launched a couple of weeks earlier, as a “short-term excursion” that would end “soon.” Last Friday, the conflict passed the six-month mark. While the U.S. and Israel are no longer bombing Iranian targets on a daily basis, roughly fifty thousand American service members are still deployed to the region; the Strait of Hormuz is largely closed to commercial shipping; a memorandum of understanding that the two sides signed in June has expired; and the Trump Administration has reportedly told Middle Eastern mediators that it has no interest in reviving it.
With no end in sight, the costs of Trump’s war are mounting. Some of them can’t be expressed in dollars and cents. According to the Pentagon, eighteen U.S. service members have been killed and more than seven hundred and fifty wounded. The Iranian death toll is in the thousands, including more than two hundred children, according to estimates from UNICEF and the Iranian government. The war has spilled over into other countries, causing hundreds more deaths—thousands, if you include Israel’s assault on Lebanon.
In principle, it’s easier to estimate the economic costs of the war; in practice, the task is far from straightforward. Even if the calculation is restricted to the United States, you first have to count the military outlays on things such as munitions, additional troop deployments, and repairing the extensive damage that Iranian counterstrikes have done to American bases in the Middle East. Then there are the financial costs that higher energy prices have imposed on American households and businesses. Plus, there are more indirect costs, such as the penalties that Americans have paid in terms of higher inflation and rising interest rates. Only by putting all these things together is it possible to estimate the total cost. But let’s start with the bill for military expenditures, which will ultimately fall on taxpayers.
One issue with tallying them is that the Pentagon has been less than forthright about many aspects of the conflict. In July, Defense Secretary Pete Hegseth told the Senate Appropriations Committee that the conflict had cost roughly $37.5 billion, but he didn’t provide much in the way of detail. Shortly before Hegseth’s appearance, NBC News reported that internal Pentagon estimates put the true figure, including military-base reconstruction costs, at somewhere between eighty billion and a hundred billion dollars. Earlier this summer, the White House asked Congress to provide an extra $67.2 billion for the Pentagon, and House Republicans approved a spending framework that included an additional seventy-three billion dollars for defense and intelligence. The Senate is expected to take up the measure when it returns in mid-September.
In air wars, the biggest single expense is often munitions, and that is true in this conflict. The Pentagon has made extensive use of precision missiles, such as Tomahawks, which cost $2.6 million each, according to the Center for Strategic and International Studies (C.S.I.S.), and advanced air-defense systems, such as Patriot-missile batteries, which cost $4.9 million. A C.S.I.S. analysis of the war’s cost, published earlier this summer, said that the Pentagon has used more than a thousand Tomahawks and as many as fourteen hundred Patriots, in addition to roughly ten thousand unguided “dumb” bombs. This dramatic rundown in munitions accounts for $26.1 billion of a total military cost of about forty billion dollars, the analysis said.
It identified the second-largest cost item as damage to U.S. bases in places such as Bahrain, Qatar, Saudi Arabia, and the United Arab Emirates, which it estimated at up to $9.2 billion. Although the Pentagon has tried to play down the effectiveness of Iran’s attacks, they appear to have destroyed, wholly or partially, hundreds of structures, including aircraft hangars, fuel depots, radar facilities, warehouses, and barracks—delivering a blow to U.S. military infrastructure without precedent in recent times. “You’d have to go back to the Second World War to see something like that,” Mark Cancian, a former Marine colonel and White House budget official who co-authored the C.S.I.S. study, told me. When the conflict ends, Cancian went on, the Pentagon will have to think seriously about whether to rebuild or abandon the damaged facilities, given their vulnerability to future attacks.
Some online estimates, which Cancian dismissed as unreliable, put the military cost at more than a hundred billion dollars. Whatever the true figure is, it’s a considerable sum that comes on top of the bloated trillion-dollar Pentagon budget that has already been approved for 2026, and it is money that could, in theory, be used for other purposes. Take the seventy-three billion dollars in extra funding that House Republicans approved. The authors of an analysis published last week by the Center for American Progress (CAP), a liberal think tank, pointed out that this amount of money would “provide full Medicaid coverage for 5 million more people, with $33 billion left over.” That money, in turn, could be used to substantially raise SNAP benefits (formerly known as food stamps) for children from poor families and double the funding for the National Park Service and for emergency food-and-shelter assistance, the CAP authors said.
In broader economic terms, the biggest burden that the war has created is sharply higher energy prices. Since late February, the cost of gasoline has risen by more than a dollar a gallon, on average, across the fifty states: that’s more than a third. And petroleum isn’t the only fuel that has become more expensive. The price of diesel, which powers the trucks that traverse the country carrying goods of all types and sizes, has risen by roughly half. According to an energy-cost tracker maintained by the Climate Solutions Lab at Brown University’s Watson School of International and Public Affairs, if you combine the rising prices of gas and diesel, the financial hit to Americans since the war began is about ninety-three billion dollars—more than seven hundred dollars per household.
That isn’t the final economic tally. The price of heating oil has shot up by about seventy per cent. The cost of fertilizers, which are largely made from methane gas, the price of which spiked after the war began, has also risen sharply, contributing to higher food prices. Given the complicated interconnections between the prices of inputs (such as energy and fertilizers) and outputs (such as food, consumer goods, and air travel), it’s hard to estimate the extent to which the war has raised the over-all price level. But the fact remains that, since February, the rate of inflation has risen from 2.4 per cent to 3.4 per cent. Market interest rates, which are influenced by inflation and inflation expectations, have also jumped up, raising the costs of mortgages, car loans, and other types of consumer credit.
Adding all these things together, Mark Zandi, the chief economist at Moody’s Analytics, put the total cost of the war for the typical American household at a thousand dollars—a figure he described as conservative. That was at the end of June. More recently, Zandi has raised his estimate to more than twelve hundred dollars. Rather than being taken as a precise number, this figure should be understood as a rough sketch that conveys the magnitude of Trump’s folly. “The war has been hugely expensive,” Allison McManus, the managing director for national security and international policy at CAP, told me. “Trump decided to launch it, and Americans are paying for it.”
Thus far, the cost to Trump has largely been restricted to sagging poll ratings. Last week, a survey from Reuters/Ipsos put his approval rating at thirty-three per cent, matching the lowest level recorded by this poll during either of his terms in office, with just twenty-five per cent of respondents approving of his handling of Iran. Absent a break in the war’s current stalemate between now and the November midterms, the President and his party may end up paying a higher political price. But the economic costs of the conflict can’t be reversed. ♦
