Trump Promised A Post-war Economic Rebound. The Damage May Linger Far Longer.

President Donald Trump is promising the economy will snap back as soon as the Iran war ends. But the economic wounds may prove slow to heal.

Beyond spiking oil prices, many of the war's domestic knock-on effects — farmers' scrambled planting decisions, upended plastic supply chains and a depressed spring housing market — will take months, possibly years, to unwind, industry analysts say. That leaves the administration with a limping economy heading into a midterm election season it had planned to spend selling its successes.

And that’s assuming the war does, indeed, wrap up in the next two to three weeks, as the president said this week. Over the weekend, the president warned Tehran that "all Hell will [rain] down on" Iran if it fails to reopen the Strait of Hormuz when the deadline to reach a deal, which he moved to Tuesday evening, expires,l — a threat that raises the prospect of further escalation rather than a swift resolution.

“I don’t think we’re going back to the pre-war prices for the foreseeable future. Certainly won’t be this year, won’t even be next year,” said Mark Zandi, chief economist at Moody’s Analytics. “Might not be ever.”

In his Wednesday night address to the nation, Trump promised that once the war was over, the Strait of Hormuz — which Iran has used to control the flow of oil and other commodities, in turn driving up global prices for a range of goods — would “open up naturally.”

From there, “the gas prices will rapidly come back down. Stock prices will rapidly go back up. They haven’t come down very much, frankly. They came down a little bit, but they’ve had some very good days over the last couple of days,” Trump said.

White House spokesman Kush Desai pointed to March’s surprisingly strong job report — which shows the economy added roughly 178,000 jobs — as a sign that the country “remains on a solid economic trajectory” and reiterated the administration’s expectation that any economic disruptions will be short lived.

For instance, aides anticipate that mortgage rates and agriculture disruptions will stabilize when the war ends — and that any disruption to plastics supply chains will have minimal impact to consumer purchasing power because plastic is such a small portion of the consumer price index.

“As the administration’s proven economic agenda of tax cuts, deregulation, and energy dominance continues taking effect, and as new trade deals and trillions in investments continue materializing, Americans can rest assured that growth is set to keep accelerating when the objectives of Operation Epic Fury are achieved,” Desai added.

Vice President JD Vance, Treasury Secretary Scott Bessent and others in the administration have also sought to reassure Americans that any short-term pain will be outweighed by long-term gain. Top administration officials have for months insisted that 2026 is the year the country’s economy turns around.

But before the war, the administration was already struggling to convince people that the economy, which Republicans argued had been badly damaged under President Joe Biden, was on the upswing. Gas prices were down to $2.98 a gallon, mortgage rates had dipped below 6 percent for the first time since 2022 and real GDP had grown by 4.4 percent in the third quarter of the year, before slowing to 0.7 percent in the fourth quarter — a promising, though mixed, picture.

Polling data through the fall and winter showed Americans increasingly worried about the cost of living — and blaming Republicans for it.

In January, Trump’s chief of staff Susie Wiles said that the president would be hitting the road weekly to sell his affordability agenda to the American people, following a bruising off-year election cycle that saw Democrats sprint to victory in part on economic issues.

Beyond a handful of appearances, that cadence of domestic travel hasn't happened. And any attempt to sell the administration’s affordability agenda will be made even more difficult by a war that’s trodden over any economic gains the country has realized in recent months.

The war has also laid bare the limits of Trump’s attempt to insulate the U.S. economy from global forces by reshoring manufacturing, notching trade deals and boosting domestic energy production. Global gasoline prices, for instance, may take months, at a minimum, to recover due to the damage done to energy infrastructure in the Middle East — and it may get worse before it gets better.

The world’s energy supplies are only just now beginning to show the strain of actual fuel shortages, said Rory Johnston, an oil analyst who writes the newsletter “Commodity Context.”

Portions of Asia are now encouraging citizens to work from home, and some areas of Europe are beginning to ration fuel, he said. And the price of diesel fuel, used to power heavier machinery and trucks, is heading toward record highs, according to AAA.

“Diesel price and gasoline prices are already being affected by that sucking, insatiable appetite for any barrel they get their hands on in Asia,” Johnston said.

When diesel prices spike, Johnston added, it quickly ripples through the economy. He predicted price spikes for transportation, the food industry, farming, shipping and more — and that the real costs of diesel are just beginning to get priced into the system beyond a consumer’s local gas station.

Those effects are already showing up in the housing market, where the war’s inflationary pressure has reversed months of hard-won progress on affordability. Before the war, the mortgage rate dip below 6 percent had been luring buyers into what looked like a promising spring buying market. Now, in just four weeks, those rates have shot back up to 6.4 percent.

“We ended 2025 sort of like, okay, let's get that behind us — really optimistic about the 2026 housing market. I would even characterize it as ‘giddy optimistic’ when rates dipped below 6 percent in February,” said Lisa Sturtevant, chief economist at Bright MLS.

If the war does wrap up in the next couple of weeks, Sturtevant predicts that the spring buying season will be delayed.

And further housing affordability relief isn’t necessarily on the horizon. A bipartisan bill aimed at making housing more affordable remains stalled on Capitol Hill and is unlikely to advance without pressure from the president to move it forward, though White House aides insist that other measures, including the president’s executive orders slashing regulations in the hope of lowering mortgage rates and promoting new housing construction, still have yet to kick in.

Farmers, meanwhile, face a narrow window in which to make decisions for the planting season — and for some, that window has already closed. In the South, where the soil warms sooner, the planting window is now; in the Midwest, where corn planting wraps up by mid-May, there is still time to adjust, though not much.

The war has hit farmers who were already struggling by driving up one of their biggest input costs: fertilizer. The prices of global urea, the nitrogen-based fertilizer of which about 50 percent flows through the Strait of Hormuz, have skyrocketed. That’s pushing farmers away from corn, which requires heavy nitrogen fertilizer applications, and toward soybeans, which don’t.

"Farmers were optimistic that things were turning the corner this year," said John Newton, vice president of public policy and economic analysis at the American Farm Bureau Federation. "And then the Strait of Hormuz closes. Urea prices have skyrocketed. Diesel prices have gone up dramatically. They were already difficult to pencil break even, and then this made it more difficult."

Unlike soybeans, corn underpins the American food supply — it's used in everything from feeding cattle to manufacturing high-fructose corn syrup — and once the planting window closes, that production is gone for the year. That could cause months-long ripple effects that lead to higher grocery prices well into 2027.

"If farmers pull back on corn acres and that drives the corn price higher, that's going to make livestock feed more expensive," Newton said. "The farmers are price takers — cattle guys feeding cattle can't just turn around and say it cost me more to feed my cattle."

Things like processed foods, cereals, condiments and snacks, which typically have ingredients like corn syrup or other byproducts of row crops that’ll be impacted by fertilizer prices — will see an “outsize” impact, according to Ricky Volpe, a former USDA economist who is now professor of agribusiness at California Polytechnic State University.

Volpe said that food and agricultural commodity prices will experience “at least a short-term bump” even if the conflict resolves soon, as Trump has promised.

“We're already past the point of no return,” he said. “The question is, how pronounced will it be and how long will it last?”

The administration is already eyeing ways to bring down fertilizer prices, with Agriculture Secretary Brooke Rollins recently touting “a couple big announcements coming” on fertilizer. The administration has already authorized the export of fertilizer and its precursors from Venezuela and has temporarily issued a 60-day waiver of the Jones Act to smooth the flow of fertilizer between U.S. ports.

But even if the war ends soon, relief won't be immediate. It takes 30 to 45 days for a fertilizer shipment to reach the United States by vessel — and with the Northern Hemisphere planting season underway globally, American farmers will be competing with buyers in India and Europe for whatever supply comes back online.

It’s similar to the long-lasting impacts in the petrochemicals supply chain. More than 99 percent of plastics worldwide are derived from fossil fuels, meaning that crude oil prices not only impact what people are paying at the gas pump, but the price of nearly all manufactured goods — cars, medical supplies, clothing, household goods and more.

With U.S. crude oil at $109 a barrel, companies are making supply chains and sourcing decisions now that will affect prices in the weeks and months to come. U.S. spot export prices for polyethylene — the world’s most widely used plastic — are already up 50 to 60 percent, according to Independent Commodity Intelligence Services.

“The die is being cast for the rest of the year for what's going to happen in the markets,” Jim Fitterling, chair and CEO of Dow, said at the CERAWeek conference in Houston in March. “It's like the unwind we saw on supply chains during Covid. You could be in the 250- to 275-day range. This is not going to be an instantaneous rewind."

Scott Waldman, Grace Yarrow and Cassandra Dumay contributed to this report.