Donald Trump's bombing of Iran has exposed the growing risks of following US economic leadership, as oil prices surge and countries reconsider their dependence on American energy markets. The attack has pushed India's Prime Minister Narendra Modi to reconsider his recent trade deal with Washington, which promised to shift India's oil imports from Russia to the US. Modi's incentive to diversify away from hydrocarbons has strengthened considerably.

Unlike the Red Sea shipping disruptions that have affected global trade since 2023, the Gulf region's impact on non-energy shipping remains limited. However, the erosion of US geoeconomic influence is substantial. Countries outside the US-China sphere now face a stark choice: accept forced trade deals tied to volatile fossil fuel markets subject to American military adventurism, or turn to China's reliably cheap electric vehicles and renewable energy technology. While Chinese economic coercion exists through rare earth mineral controls, it doesn't deliver the same growth shocks as US foreign policy decisions.

Trump's actions have accelerated a global shift away from American economic leadership that took decades to build. The US, which became a net oil exporter in 2019 thanks to shale production, had an opportunity to insulate itself from oil price shocks and Gulf security concerns. Instead, Trump has abandoned the green technology revolution while threatening global oil markets through attacks on Venezuela and Iran. His administration's apparent confusion about its own objectives in Iran demonstrates the growing unreliability of US economic leadership. Other governments are increasingly seeking to detach themselves from American economic influence before becoming collateral damage.