Trump pivots back to sanctions for Iran as other strategies to end his war fizzle

Bloomberg08-11 22:18

WASHINGTON — U.S. President Donald Trump likes to say that he started his war with Iran after 50 years of economic pressure had failed to stop its nuclear weapons ambitions — but he’s now betting that...

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It’s part of a larger pivot this weekend by Trump to argue that Iran is now on the cusp of financially collapsing, even though it has already endured decades of financial sanctions, which are often a longer-term strategy rather than an immediate tool of warfare that can halt a conflict.President Donald Trump walks to board Air Force One at Morristown Airport, Sunday, Aug. 9, 2026, in Morristown, N.J. (AP Photo/Julia Demaree Nikhinson) U.S. President Donald Trump walks to board Air Force One at Morristown Airport, Sunday, Aug. 9, 2026, in Morristown, N.J. (AP Photo/Julia Demaree Nikhinson) The shift comes as U.S. stockpiles of key weapons have dwindled and as stop-start talks seem again to have stalled. But Trump insists the pressure can lead to a breakthrough.“Yeah, they can make trouble, but they’re broke,” Trump told reporters. “They have no money. You know, Iran is broke, totally broke. And, they’re not paying their soldiers. They have inflation of 300 per cent.”Inflation is running high in Iran, although Trump’s estimates were higher than what administration officials have been citing to reporters. But the prospect of a longer war also carries inflation risks for other nations, including the U.S., where the war and higher gasoline prices are unpopular.Crude oil prices climbed on Monday as investors interpreted Trump’s comments as a sign that fewer ships would be traversing the Strait of Hormuz, continuing to limit global supplies of gasoline, jet fuel, natural gas and other forms of energy. The Iran war largely closed the waterway involved in shipping roughly 20 per cent of global oil supplies before the conflict — and attempts to reopen the strait have been short-lived as it has become a source of leverage for the Iranians in negotiations.Iran does not appear to be publicly intimidated by the prospect of more financial sanctions.“Whenever Washington proves itself incapable of pursuing diplomacy, it retreats into sanctions; and whenever those sanctions fail to produce results, it simply increases the dose,” said Esmail Baghaei, spokesman for Iran’s Foreign Ministry, on social media. “The real risk is that American politicians, clinging to this bad habit, will instead strangle their own remaining chances of a less humiliating exit from a crisis of their own making.”Vehicles drive past a statue of a swinging boy at a square in Tehran, Iran, Monday, Aug. 10, 2026. (AP Photo/Vahid Salemi) Vehicles drive past a statue of a swinging boy at a square in Tehran, Iran, Monday, Aug. 10, 2026. (AP Photo/Vahid Salemi) The White House has called this Operation Economic FuryThe president didn’t say what additional financial pressure would be applied, but the administration has since April 16 been engaged in what it calls Operation Economic Fury against Iran. U.S. Treasury Secretary Scott Bessent called this component the “financial equivalent” of a bombing campaign as the countries that buy oil from Iran or bank with it could be sanctioned.But one problem with this pivot is that the sanctions are unable to bite as quickly as the impact of the largely shuttered strait, said Richard Nephew, a senior research scholar at Columbia University who helped direct Iran sanctions strategy in the Obama administration.Nephew stressed that the value of sanctions as a tool is limited because Trump has not articulated clear strategic goals for the war, at times stressing that it can’t have a nuclear weapon, then emphasizing the strait and then talking about ballistic missiles. Instead, Trump has engaged in a massive series of aerial assaults and a level of destruction that has not produced the quick end that he initially promised.“Economic pressure is a possible element in his strategy, but he’s yet to explain the purpose,” Nephew said. “Trump has systematically weakened his own hand through his inadequate use of force, inarticulate elucidation of an objective, and vacillation on negotiations.”Still, the sanctions and the ongoing U.S. naval blockade of Iranian ports give the U.S. economic and financial leverage, said Juan Zarate, a deputy national security adviser in the George W. Bush administration. Zarate said the U.S. sanctions threatening third-party countries doing business with Iran also have an impact. But these things take time, he noted.“The ultimate question will be how far the United States is willing to go to constrict Iran’s oil trade and threaten third countries with severe sanctions -- and whether it has the patience to test whether the economic pain will change the regime’s behavior,” Zarate said.As Defense Secretary Pete Hegseth watches at left, President Donald Trump gestures as he switches planes at U.S. Air Force Base, RAF Mildenhall in Suffolk Eastern England, on his way back to Washington from the NATO summit in Ankara, Turkey, Wednesda... As U.S. Defense Secretary Pete Hegseth watches at left, U.S. President Donald Trump gestures as he switches planes at U.S. Air Force Base, RAF Mildenhall in Suffolk Eastern England, on his way back to Washington from the NATO summit in Ankara, Turkiye, Wednesday, July 8, 2026. (AP Photo/Alex Brandon) Past presidents used sanctions. Trump has said they didn’t go far enoughTrump’s latest pivot to economic issues with Iran is something of a flip-flop. Trump has long derided past presidents who used sanctions to limit Iran’s economic ability to pay for its military and nuclear development. In a speech last week in Las Vegas, he defended the bombing, missiles and drone attacks that began on Feb. 28 by indicating that the sanctions from previous administrations that date back to November 1979 had failed to succeed.“It’s been 47 years, but really, it’s been 50 years because they’ve been saying 47 for three years, it’s been 50 years,” Trump said. “And no other president has done what you should have done a long time ago, because Iran cannot have a nuclear weapon, can’t have it.”The Iranian economy has suffered gravely because of the war, with the International Monetary Fund estimating the overall economy shrinks by 5.4 per cent and the Iranian government recently reporting an annual inflation rate of 88.6 per cent. The U.S. Treasury Department said average loadings of Iranian oil have decreased from 1.8 million barrels per day before the war to less than 500,000 barrels per day over the past month.The U.S. economy — the world’s largest — has continued to grow, but inflation is elevated and borrowing costs have risen in ways that have hurt Trump’s popularity and led to disapproval of the Iran war.A senior U.S. official, insisting on anonymity to discuss strategy, said the U.S. military has set back Iran’s ability to produce, sell and ship oil and other energy resources. The administration sees the naval blockade of the strait and sanctions as effective and views Trump as having additional options that can be cranked harder in the weeks and months ahead.Trump is essentially arguing that U.S. voters are better able to tolerate any economic inconveniences than Iranians, who have been in a state of economic hardship for years.“It’s not just what the military can do — we’ve got the most powerful economy in the world as well,” U.S. Defense Secretary Pete Hegseth said Monday in a joint appearance with Bessent. ”And when you’ve got a motivated treasury secretary who can pull a lot of levers because he knows how to do it, you can put a lot of pressure on adversaries.”___Josh Boak And Fatima Hussein, The Associated PressAP White House reporter Aamer Madhani contributed to this report.Related StoriesTrump scoffs at Iran’s demand for war reparations and other Mideast developments","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":false,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"isLaohu8Offline":false,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.47.1","shortVersion":"4.47.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2658128969","isCrawlerRequest":true}