As the United States and Israel press their war of aggression against Iran—now entering its second month—attention has understandably focused on the carnage in the Middle East. Yet with the Strait of Hormuz effectively blockaded and global energy markets in turmoil, the conflict’s ripples extend far beyond the Persian Gulf.
In East Asia, America’s closest treaty allies, Japan and South Korea, are absorbing punishing economic shocks from their dependence on Middle Eastern oil, while Washington’s diversion of military assets has left them feeling exposed and annoyed. Meanwhile, Beijing, Washington’s bete noire, looks on with barely concealed satisfaction, its state media churning out satirical videos that mock yet another American entanglement in the region’s endless conflicts. For those who have long warned that empire abroad undermines security and prosperity at home, the spectacle offers a textbook case of the predictable, if unintended, costs of interventionism.
Japan and South Korea have built modern industrial economies on imported energy, with neither possessing significant domestic oil reserves. Japan imports roughly 95% of its crude from the Middle East, the vast majority transiting the Strait of Hormuz; South Korea relies on the Gulf for about 70% of its supply. When Iran responded to the initial U.S.-Israeli strikes by closing the strait, what had been easily predictable happened: oil prices spiked, supply chains strained, and Tokyo and Seoul scrambled to release strategic petroleum reserves. Japan has already begun drawing down its 254-day stockpile, instructing national storage facilities to prepare for further releases. Seoul has imposed its first fuel price cap in nearly three decades and rolled out emergency budgetary measures totaling billions of dollars to shield households and export industries from the worst of the shock. Petrochemical giants in both countries have slowed output, warning of shortages in everything from plastics to semiconductors.
These are not abstract inconveniences. Japan’s export-oriented manufacturing—automobiles, electronics, steel—runs on cheap, reliable energy. South Korea’s semiconductor and shipbuilding sectors, pillars of its global competitiveness, face the same vulnerability. Higher energy costs feed directly into rising prices, squeezing real wages and corporate margins at a moment when both economies were already navigating post-pandemic recovery and demographic headwinds. Public anxiety is palpable. Japanese opposition leaders have questioned in parliament whether U.S. forces stationed on their soil should be free to sortie into Middle Eastern conflicts, effectively treating Japanese bases as forward operating posts for Washington’s wars. In South Korea, Buddhist monks have taken to the streets in protest against the U.S.-Israeli campaign, reflecting broader unease that Seoul’s alliance with Washington is dragging the peninsula into distant troubles.
The military dimension compounds the economic pain. As the Pentagon pours resources into the Gulf, redeploying THAAD and Patriot batteries from South Korea, shifting Marines and amphibious ships from Japan, and sending destroyers based in Yokosuka to the Arabian Sea, Washington’s Asian vassals are left wondering whether their own security guarantees are being quietly hollowed out. North Korea remains a nuclear-armed wildcard on the peninsula; tensions with China over Taiwan and the South and East China seas continue to simmer. Yet Washington’s “burn rate” in the Middle East is creating what analysts call a “thin spot” in the U.S. security umbrella. South Korean officials insist they can deter Pyongyang even without every American system on station, but the optics are unmistakable: treaty allies who have hosted tens of thousands of U.S. troops for decades, footing a significant portion of the economic burden, now find those same forces being siphoned off to prop up yet another Middle Eastern adventure. The message, however unintended, is that Washington’s priorities lie elsewhere.
Beijing, by contrast, appears to be playing a stronger hand. China imports roughly 40% of its oil from the Middle East but entered the crisis with massive strategic stockpiles—estimates run as high as 1.4 billion barrels—and alternative supply lines via Russian pipelines and overland routes from Iran. Iranian authorities have reportedly allowed Chinese-flagged vessels to continue transiting the strait while blocking others. Beijing’s state-owned energy majors have been ordered to maintain stable supplies, and yuan-denominated deals with Tehran are reportedly under discussion. Economically, China is better buffered than its Northeast Asian neighbors; strategically, it stands to gain.
Official Chinese statements have been predictably cautious, condemning the strikes as violations of sovereignty and calling for de-escalation, yet state media and social platforms have been far less restrained. AI-generated animations and viral videos have proliferated, satirizing Washington’s latest “quagmire” with gleeful precision: a hapless American eagle stumbling into yet another desert trap, while the Chinese dragon watches from afar. It is not difficult to see that for Beijing the war is a gift. It diverts American attention, treasure, and munitions from the Indo-Pacific; it strains Washington’s alliances; and it reinforces the narrative that the United States is an unreliable partner addicted to endless conflict. While Tokyo and Seoul tighten their belts and recalibrate their defense postures, Chinese analysts quietly note the opportunity to position Beijing as the steady, non-interventionist power in East Asia: willing to trade, invest, and talk rather than bomb.
This is precisely the dynamic libertarians have warned against for decades. Economist Murray Rothbard and the broader Austrian tradition have long emphasized that the state’s foreign adventures are not costless externalities; they are predictable consequences of the incentive structure facing political elites. At home, wars generate contracts for the military-industrial complex, headlines for politicians, and temporary unity against a foreign “threat,” even as they erode constitutional restraints, inflate the money supply, and impose hidden taxes on the productive economy.
The true costs of empire are paid not only by those on the receiving end of the bombs but by Americans and supportive governments around the world. Until that reality is confronted, the quagmires will continue, and the bill will keep coming due in unexpected places.
Of course, empires do not fold-up shop of their own accord; they must be forced to close down. And with the democratic process in the United States having proven continually unfit for the task, arguably our best hope is for Washington’s longstanding “coalition of the willing,” its reliable list of vassals-cum-partners, to finally see the cost of the status quo as being too high a price to pay and abandon Washington.
From Europe to the Middle East to East Asia, the disastrous foreign policy of Donald Trump’s second term might just do it.
There’s always hoping.
