Trump’s Gulf Business Diplomacy Can’t Ignore the Iran Problem

President Donald Trump’s latest trip to the Gulf confirmed one obvious message: despite Washington’s past promises to “pivot” from the Middle East to East Asia, the United States has no plans to withdraw from the region. That said, Trump’s approach has been vastly different from that of past U.S. presidents, who focused on democratization, large military deployments, or post-9/11 interventionism. His government has stressed a new age of cooperation—one founded on mutual business interests rather than the traditional client-patron model that has long defined the region. During a meeting with Emirati President Mohamed bin Zayed al-Nahyan at the Palace of the Nation, Trump responded to the UAE’s massive new investment in the United States by saying, “Thank you very much. We will work very hard to deserve it.” It was a revealing moment: in effect, Trump indicated that the United States now wanted to be the Gulf’s primary economic partner, amid China’s growing influence in the region.

The deals announced during Trump’s meetings with Saudi Arabia, the UAE, and Qatar were historic in both scope and ambition. But what stood out across all three visits was the repeated mention of Iran—specifically, its nuclear program and its regional activities. Trump criticized the Iranian regime for failing its people, while praising Gulf states for transforming desert landscapes into hubs of prosperity and modernity. The American president’s focus on Iran was not just rhetorical. It reflected a shared understanding between the U.S. and Gulf countries; without addressing Iran’s destabilizing role in the region no amount of economic investment could ensure lasting economic success. In sum, Trump’s message was simple: security and stability were the foundation for Middle Eastern prosperity, and Iran remained the central obstacle to both.

Despite Setbacks, Iran Still Poses a Threat

Tehran is on the back foot all across the Middle East. Since Hamas’ October 7 attack in Israel, the Axis of Resistance has suffered catastrophic losses: the collapse of Hezbollah’s operational capacity and the death of longtime leader Hassan Nasrallah in Lebanon, the fall of the Assad regime in Syria, and the battering of Iranian proxy militias in Iraq. Still, one potent force remains on Tehran’s side: the Houthis. Iran has increasingly shifted toward a maritime “long hand” strategy since 2020, involving the deployment of Iran’s traditional instruments of asymmetric warfare—namely missiles, drones, and advisors into the maritime domain, empowering the Houthis to disrupt commercial and naval activity in the Red Sea and beyond.

For countries like Saudi Arabia and the UAE—both of which have been targeted by Iran-backed groups, including the Houthis—the threat is tangible. These states know that no economic vision, including Saudi Arabia’s ambitious Vision 2030, can succeed without managing the threat from Iran. The Saudi-Iranian normalization agreement, struck in Beijing in 2023, was an attempt to do just that. While that accord helped reduce regional tensions, the Houthis still hang over the Gulf like the Sword of Damocles—ready to strike if diplomacy falters.

This is why the Gulf states are not only concerned about Iran’s nuclear enrichment—they are even more anxious about what a nuclear deal might mean for Iran’s ability to finance and rebuild its regional proxy network. A deal that lifts sanctions but fails to limit Iran’s missile program or restrain its proxy forces would effectively allow Iran to restore its regional power and start causing instability once more.

On the other hand, the absence of any deal is just as dangerous. Left unchecked, Iran would be free to keep using its proxies to endanger maritime and regional security and to push forward its threshold nuclear program. Gulf and American leaders face a conundrum: deterrence without diplomacy risks escalation, while diplomacy without deterrence risks empowering Tehran’s hegemonic aspirations.

A Necessary Adversary

The Islamic Republic’s motivations to continue the struggle go beyond pragmatic geopolitics; they are rooted in ideological survival. Iran’s clerical regime was built on opposition to the U.S. presence in the Middle East and the existence of Israel. These two core concepts were reiterated once again in a speech by Supreme Leader Ali Khamenei in mid-May, even as Iran’s regional influence continues to decline. Reacting to Trump’s remarks in Saudi Arabia during a public meeting, Khamenei emphasized: “With the efforts of the nations of the region, America must and will leave this region.”

As Iran’s influence wanes, however, so does the ideological glue that holds the Islamic Republic together. Without external enemies, its internal contradictions, systemic corruption, failing institutions, and widespread public dissatisfaction would become impossible to ignore or brush aside. Viewed from this perspective, reactivating the regime’s support for proxy militias and fomenting regional crises are not only useful foreign policy tools, but vital tactics for maintaining the clerical regime.

Ultimately, any meaningful economic transformation in the Gulf will require more than infrastructure, investment, or innovation. It will require a stable regional security architecture that includes a credible and enforceable strategy for containing Iran’s threats. Whether through a comprehensive agreement that addresses Iran’s nuclear program, missile arsenal, and proxy groups or through coordinated regional deterrence, both Washington and its Gulf allies must address the Iran challenge head-on. Otherwise, the Gulf’s vision of “prosperity” will remain hostage to the unresolved dangers that haunt the Middle East.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of Gulf International Forum.