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Back|Trump administration shifts to economic pressure as war with Iran reaches six-month mark
Trump administration shifts to economic pressure as war with Iran reaches six-month mark
Developing
Economic Times·4 hours ago·Politics·5 min read·🇮🇳India

Trump administration shifts to economic pressure as war with Iran reaches six-month mark

President Trump faces criticism over the prolonged conflict as the U.S. pivots to sanctions and economic isolation of Iran.

Quick Look

  • As the U.S.-Israel war against Iran hits six months, President Trump is shifting strategy from military action to economic sanctions.
  • Despite claims of success, the conflict has cost $37.5 billion, and the administration faces challenges regarding global readiness.

AI-generated summary

Why It Matters

The U.S.-Israel war against Iran has lasted six months, with significant costs and damage to Iranian infrastructure. The U.S. is now shifting focus toward economic pressure via 'Operation Economic Outcast'.

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Washington: President Donald Trump arrives at an awkward moment for his presidency on Friday as the U.S.-Israel war against Iran reaches the six-month mark, a notable milestone for a conflict that the Republican leader repeatedly assured Americans would be a "little excursion" lasting a matter of weeks.

The war isn't over, though Trump claims that through bombs and blockade, he has already devastated Iran's leadership, military and economy.

And this week his administration said it would turn its focus to increasing economic pressure - rather than military action - to try to finish off Iran. The shifting strategy centers on threats to punish any country or entity that continues to conduct business with Tehran.

The turn to using sanctions as the cudgel of choice comes as the administration weighs diminished munitions stockpiles after months of war, sparking concerns that the prolonged conflict could undermine U.S. military readiness in other parts of the globe.

As the conflict grinds on, Trump's talk of finding a quick end to the war also appears to be fading. He stressed this week that he's "not in a hurry" to get Iran back to the negotiating table, and he continues making the case that the Islamic Republic's leadership is on the ropes.

"They're not paying their troops. They're in deep trouble. They have very little capacity," Trump told reporters Thursday. "We don't want to speak to them. We're not looking to meet or anything," he said.

It's unclear how - or if - Trump will address the six-month anniversary of a conflict that has already cost the United States more than $37.5 billion and done damage to his popularity ahead of critical November elections for his party. The president is spending Friday in Houston, where he'll honor the Artemis II NASA crew for their 10-day mission around the moon earlier this year.

On its face, the moment is complicated for the "America First" leader who fiercely criticized his White House predecessors for wasting American taxpayer money and U.S. troops' lives in Middle East conflicts and vowed on the campaign trail to keep the military out of "endless wars."

But Trump has bristled at suggestions that this war - in which no American troops have deployed into Iran - can be compared to the yearslong wars in Iraq and Afghanistan in which more than 7,000 Americans were killed.

His Republican predecessor, President George W. Bush, was widely mocked for a 2003 speech aboard the USS Abraham Lincoln beneath a White House-produced banner that read "Mission Accomplished." It came to symbolize a premature declaration of victory for the Iraq War, which would go on for nearly nine more years. More than two decades later, there are still U.S. troops stationed in Iraq.

Trump's war has stretched on far longer than he told Americans it would. It didn't stop him from sharing a social media post this week declaring "MISSION ACCOMPLISHED 2026." The AI-generated image features Trump against a backdrop of U.S. fighter jets, a warship and American flags above smaller images of Bush and former Iranian Supreme Leader Ayatollah Ali Khamenei, who was killed in an Israeli strike in the opening salvos of the war.

Trump has consistently emphasized that the U.S. and Israel campaign has been devastating for Iran's navy and air force. Iranian officials have said the country has suffered $270 billion in direct and indirect damage. Israeli military strikes in the first weeks of the war wiped out much of the theocratic government's leadership structure, including Khamenei.

But Iran has found leverage through its own strikes in the critical Strait of Hormuz, where relatively few vessels carrying oil and liquefied natural gas are risking passage. Trump again declared Thursday that the "Strait of Hormuz is open," saying 24 vessels passed through a day earlier. That's a fraction of the roughly 130 vessels that passed through the vital waterway daily before the war began.

Mediators Qatar and Pakistan continue to press for a diplomatic off-ramp from the two sides. Qatar's prime minister, Sheikh Mohammed bin Abdulrahman Al Thani, was in Tehran on Thursday to discuss a proposed plan between Iran and Oman to boost traffic through the Strait of Hormuz.

But in Washington, Trump has shown little interest in getting back to the preliminary deal reached in June that aimed to reopen the strait and launch talks about Iran's nuclear program. That deal fell apart within weeks after Iran started attacking ships.

At the same time, Trump says the U.S. effort to economically choke off Tehran is working, with a U.S. naval blockade preventing Iranian oil from making it to market as the trickle of vessels carrying oil from other Gulf nations pass through.

"We have control and we have the blockade," Trump said. "Iran is not getting anything. Nothing is going through."

There's no doubt that the strikes combined with decades of international sanctions have battered Iran, said Aarathi Krishnan, a geopolitical risk analyst at RAKSHA Intelligence Future.

But as Trump tries to turn to a new chapter in the war, Krishnan argues the Republican may be misguided in concluding that more pressure on Tehran - which has spent decades adapting to international economic sanctions - will produce the political outcome he wants.

Indeed, Iran's economy in the run-up to the start of the war was mired in surging inflation, according to the International Monetary Fund. National income per person had fallen from about $8,000 in 2012 to $5,000 in 2024, according to World Bank data.

But Tehran has also shown resilience, selling discounted oil and establishing opaque shipping and financial networks, Krishnan said.

"This administration has completely underestimated the Iranian resolve," Krishnan said. "This is not new to the Iranian regime."

Richard Goldberg, who served as a senior adviser on Iran at the National Security Council during Trump's first White House term, argues that Iran now finds itself in "uncharted waters" if the administration follows through with a truly biting campaign to pressure Iranian trade partners.

"What we should be seeing is an attempt to seal off every escape hatch the regime has left," said Goldberg, who is now at the Foundation for Defense of Democracies, a hawkish Washington think tank. "Use the economic power of the United States to layer a naval blockade with an air and land embargo while dropping the hammer on anyone who gives the regime access to hard currency - whether that's in the Middle East, China or even Europe."

But it remains to be seen how far the administration is willing to go.

Treasury Secretary Scott Bessent this week unveiled a campaign the White House calls "Operation Economic Outcast," but only issued warnings to nations to cut trade and has yet to announce any secondary sanctions. Bessent told reporters the administration wanted countries to have a chance to shift away from Iran before it was too late - and acknowledged there was economic risk to the U.S., too, in moving ahead.

China, which is Iran's biggest trade partner and oil buyer, responded by expressing its opposition to "illegal unilateral sanctions."

Pressed Thursday about why he wasn't already sanctioning Chinese banks, Trump offered a cryptic response.

"Who said I'm not? You don't know if I'm doing it," Trump said. "I don't have to announce everything, do I?"

What to Watch

AI outlook — possibilities, not facts

  • Administration to decide on secondary sanctions for trade partners.

    Likely · Within weeks

Open Questions

  • ?Will the U.S. impose secondary sanctions on Chinese banks?
  • ?How will Iran respond to the new economic pressure campaign?

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This article was originally published by Economic Times.

Quick Look

  • As the U.S.-Israel war against Iran hits six months, President Trump is shifting strategy from military action to economic sanctions.
  • Despite claims of success, the conflict has cost $37.5 billion, and the administration faces challenges regarding global readiness.

AI-generated summary

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High
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Developing
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Economic Times
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Published
4 hours ago
Last updated
4 hours ago

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