Hank Paulson says the US economy can handle the Iran war's fallout better than anyone else

Former Treasury Secretary Hank Paulson is making the case that the US economy can withstand the turbulence sparked by the ongoing conflict with Iran better than any other major economy. Speaking in a recent Bloomberg Markets interview, Paulson pointed to the depth of US financial markets, energy independence, and strong domestic consumption as key buffers. While global shocks are inevitable, he argued, the structure of the American economy gives it a unique advantage when weathering international crises.

The conversation comes amid rising concerns about how the conflict is disrupting energy flows and supply chains. Oil prices have seesawed in recent weeks, and shipping through key Persian Gulf routes remains tense. Paulson acknowledged these pressures but stressed that the US is less dependent on Middle Eastern oil than in past conflicts. Still, he warned that secondary effects-like inflation spikes or financial contagion-could reach American markets through global trade and investor sentiment.

One underdiscussed risk, Paulson noted, is the strain on critical mineral supplies, especially copper. Demand for copper is soaring due to clean energy projects and AI infrastructure, but production isn't keeping up. The US currently relies heavily on imports, and geopolitical disruptions could worsen shortages. He called for more investment in domestic mining and processing to reduce long-term vulnerabilities.

Meanwhile, former UK foreign secretary David Miliband offered a different angle, warning that cuts to overseas aid are making the global response to the crisis weaker. In an interview with The Guardian, Miliband said that reducing humanitarian funding doesn't just hurt vulnerable populations-it increases the risk of broader economic instability. Refugees, food shortages, and collapsed health systems can create ripple effects that eventually reach wealthy nations through migration, trade, and security threats.

Miliband specifically criticized aid reductions by the US and UK, calling them short-sighted. He argued that investing in global stability isn't just a moral obligation but an economic safeguard. Without it, regional crises can escalate into systemic risks that no single country, not even the US, can fully insulate itself from.

Paulson didn't dispute the importance of global stability but focused on what the US can control. He emphasized the need for clear fiscal policy, especially as debates heat up over tax changes that could affect investment and growth. Uncertainty in Washington, he said, could undermine confidence at a time when steady leadership matters most.

Together, these views highlight a split in how leaders are thinking about risk: one focused on national resilience, the other on interconnected global consequences. The US may be better positioned than most, but in a tightly linked world, no economy stands entirely apart from the fallout of war.