Virendra Pandit
New Delhi: In 2025, Financial Times columnist Robert Armstrong coined the financial acronym “TACO” to describe the trade strategy and market reaction to US President Donald Trump’s mercurial trade and tariff policies: Trump Always Chickens Out. It referred to the pattern of announcing severe tariffs, causing market dips, and then reversing or delaying them, allowing for a market rebound.
This is what happened late on Tuesday, when Trump quickly climbed down from his rhetoric of sending Iran back to the Stone Age and annihilating a civilization.
For now, the US, Iran, and Israel may have reached a two-week ceasefire deal.
Iran’s Supreme National Security Council has, the media reported, accepted a two-week ceasefire and that it would negotiate with the US in Islamabad, beginning Friday.
The pause, which Pakistan claimed it facilitated—although Trump acknowledged China’s role!–hinges on reopening the Strait of Hormuz and advancing negotiations on a broader peace framework, the media reported.
Reports said Trump pulled back on his dire threats to launch devastating strikes on Iran late Tuesday, swerving to de-escalate the war less than two hours before the deadline he set for Tehran to capitulate or face a major escalation.
Trump said he was holding off on his threatened attacks on Iranian bridges, power plants and other civilian targets, subject to Tehran agreeing to a two-week ceasefire and reopening of the Strait of Hormuz, the waterway through which a fifth of the world’s oil is shipped during peacetime.
He also said Iran has proposed a “workable” 10-point peace plan that could help end the war, launched by the US and Israel on February 28.
Iran’s response
Iranian Foreign Minister Abbas Araghchi said the vessels’ passage through the Strait of Hormuz would be allowed for the next two weeks under Iranian military management. It wasn’t immediately clear whether that meant Iran would loosen its chokehold on the waterway—or whether it will charge toll.
In a post on his social media site, Trump said that he would suspend attacks on Iran for two weeks provided Tehran agreed “to the COMPLETE, IMMEDIATE, and SAFE OPENING” of the Strait.
Iran’s demands for ending the war include control of the Strait, the withdrawal of US combat forces from the region, the lifting of sanctions and the release of its frozen assets. The demands indicate an effort to remake both the geopolitical order in the West Asia and the global oil trade.
Tensions persist
Despite the ceasefire announcement, missile alerts continued in the United Arab Emirates, Israel, Saudi Arabia, Bahrain and Kuwait early Wednesday, hinting at the chaos surrounding the diplomatic moves.
The US military has halted all offensive operations against Iran but continues defensive actions.
Since the war began, Trump has repeatedly backed off deadlines just before they expire.
Pakistan’s role
In doing so again Tuesday, Trump said he had come to the decision “based on conversations” with Pakistan Prime Minister Shehbaz Sharif and Army chief General Asim Munir.
Sharif, in a visible copy-paste post on X, “urged” Trump to extend his deadline by two weeks to allow diplomacy to advance. He used the same post to ask Iran to open the Strait for two weeks.
The US President said in his social media post that Iran has presented “a workable basis on which to negotiate/”
“Almost all of the various points of past contention have been agreed to between the United States and Iran, but a two-week period will allow the Agreement to be finalized and consummated,” Trump said.
Israel’s stance
Israel has also agreed to the terms of the two-week ceasefire agreement, according to a White House official. And Sharif said the ceasefire extends to Israel and Hezbollah halting fighting in Lebanon.
But there are concerns in Israel about the agreement. Israel would like to achieve more.
Iran’s stockpile of highly enriched uranium is still buried at enrichment sites. The programme had been one of the main issues cited by both Israel and the US in launching the war some 40 days ago.
Reactions
Trump’s expansive threat Tuesday did not seem to account for potential harm to civilians, prompting Democrats in Congress, some United Nations officials and scholars in military law to say such strikes would violate international law.
Tehran’s representative at the UN, Amir-Saeid Iravani, said the threats “constitute incitement to war crimes and potentially genocide” and that Iran would “take immediate and proportionate reciprocal measures” if Trump launched devastating strikes.
The US and Israel have battered Iran with severe air attacks targeting its military capabilities, leadership and nuclear programme. Iran has responded with a stream of counter-strikes on Israel and Gulf Arab neighbours, causing regional chaos and outsized economic and political shock.
Escalation
Late Tuesday, Sharif urged Trump to extend his deadline by two weeks to allow diplomacy to advance. In a post on X, Sharif, whose country has been leading negotiations, also asked Iran to open up for two weeks the Strait of Hormuz.
Before the deadline, airstrikes hit two bridges and a train station, and the US hit military infrastructure on Kharg Island, a key hub for Iranian oil production.
Since the war began, Trump has repeatedly imposed deadlines linked to threats, only to extend them. Tehran previously rejected a 45-day ceasefire proposal by Egyptian, Pakistani and Turkish mediators, saying it wants a permanent end to the war.
Ground realities
Iran President Masoud Pezeshkian said 14 million people, including himself, have volunteered to fight. That’s despite Trump saying that US forces could wipe out all bridges in Iran in a matter of hours and reduce all power plants to smoking rubble in roughly the same time frame.
It was not clear if airstrikes against Iran on Tuesday were linked to Trump’s threats to widen the civilian target list.
At least two of the targets were connected to Iran’s rail network, and Israel Prime Minister Benjamin Netanyahu said Israeli warplanes struck bridges and railways in Iran.
Tehran fired on Israel and Saudi Arabia, prompting the temporary closure of a major bridge.
Economic stakes
Iran’s chokehold on the Strait since the war began roiled the world economy and raised the pressure on Trump both at home and abroad to find a way out of the standoff.
“A whole civilisation will die tonight, never to be brought back again,” if a deal isn’t reached,” Trump said in an online post on Tuesday morning. But he also seemed to keep open the possibility of an off-ramp, saying that “maybe something revolutionarily wonderful can happen.”
Earlier, Iranian official Alireza Rahimi issued a video message calling on “all young people, athletes, artists, students and university students and their professors” to form human chains around power plants.
Iran’s mobilisation
As they did in the past, Iranians formed human chains around infrastructure threatened by the US-Israeli bombing. State media posted videos online that showed hundreds of flag-waving people massed at two bridges and at a power plant hundreds of kilometres from Tehran, although it was not clear how widespread the practice was.
“They’re not allowed to do that,” Trump said in a phone call with NBC News.
A general in Iran’s Islamic Revolutionary Guard Council (IRGC) warned that Iran would “deprive the US and its allies of the region’s oil and gas for years” and expand its attacks across the Gulf region if Trump carries out his threat.
Global criticism
In Rome, Pope Leo XIV said Tuesday that the threats were “truly unacceptable” and that such attacks would violate international law.
French Foreign Minister Jean-Noël Barrot said that attacks targeting civilian and energy infrastructure could constitute a war crime. Such cases are notoriously difficult to prosecute. Trump has said he’s “not at all” concerned about committing war crimes.
A spokesman for UN Secretary-General Antonio Guterres said he was “deeply troubled” by the threats, saying no military objective justified targeting civilian infrastructure.