US President Donald Trump’s strategy to strangle the Iranian economy through sanctions and a naval blockade is facing a difficult test, as Tehran remains firm in its position and is prepared to bear heavy economic burdens rather than accept American conditions.
Politico Magazine reported, citing former Trump administration officials, U.S. ambassadors, and Middle East experts, that there is skepticism about the economic war promised by Treasury Secretary Scott Bessent, which he said would be “a different kind of war” from previous ones.
The magazine noted that President Donald Trump is waiting for Iran to raise the white flag as a result of his economic war. But Tehran appears ready to wait longer, and will not respond to his demands to abandon levies on ships passing through the Strait of Hormuz or to the other demands Trump wants to achieve in order to bring the war to an end.
James Jeffrey, a former ambassador who served in three administrations, including Trump’s first, commented: “It’s a war of attrition, and I’m sure the Treasury Department is making minor tweaks here or there to plug gaps or broaden sanctions,” adding: “It’s hard to believe anything decisive will happen after 20 years of U.S. sanctions and Iran’s experience in circumventing them.”
Politico stressed that this statement reveals an unequal situation. The Trump administration is facing decisive midterm elections amid an unpopular war that has pushed oil prices to around $90 a barrel and helped drive long-term borrowing costs to their highest level in nearly two decades, at a time when hopes for a peace deal are fading.
In contrast, Iranian leaders view the conflict as existential, which gives Tehran justification to endure massive economic pain rather than accept terms it believes could endanger the regime — especially as U.S. inflation remains high and Treasury bond prices fall.
The magazine noted that the yield on the U.S. 30-year Treasury bond — an indicator Trump has always paid close attention to — rose on Tuesday to its highest level since before the global financial crisis.
It pointed out that the yield rising to its highest level in nearly two decades is not due only to the six-month-long war. A global fuel shortage and general instability have also kept energy prices high for longer, increasing the risk of persistent inflation.
It added that this has increased risks for global bond markets, which have long been negatively affected by shocks linked to Trump.
Julia Coronado, founder of “MacroPolicy Perspectives,” said: “We are in a position where we are spending more and more to fund more and more.”
She explained that the war has created “a more dangerous world, full of tensions and supply shocks.”
The magazine concluded that Iran’s ability to withstand pressure is one of the reasons some former U.S. administration officials doubt that a naval blockade — unprecedented in scope in the modern era — or any new strategies Bessent may unveil, will be enough to change Iran’s calculations.
Source: Politico