President Trump announced a shift in U.S. policy toward Iran, emphasizing economic isolation while reducing joint military exercises with South Korea. This strategy aims to replace direct military engagement with economic sanctions to pressure Iran. Markets remain skeptical about an imminent nuclear deal, with the pricing for a resolution before August 18, 2026 set at only 0.1%. The reduction in military drills with South Korea aligns with a trend toward lower visible military posture, even as combined readiness against North Korea remains a priority.
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