Will the Trump Administration’s latest economic pressure on Iran work?

0:00For the past 25 years, a rare Pacific ecosystem has been undisturbed. Now, the Trump administration is opening nearby waters to commercial fishing. America's fishermen have never had a better ally in the White House than Donald Trump. This week on The Sunday Story, we discuss what's at stake for this wild ecosystem. Listen now to The Sunday Story from the Up First podcast on the NPR app. Today on State of the World, will the Trump administration's latest economic pressure on Iran work.

0:34You're listening to State of the World from NPR. We bring you the day's most vital international stories up close where they're happening. I'm Greg Dixon. U.S. Treasury Secretary Scott Besant announced new pressure on Iran Monday that the administration is calling an economic D-Day. Almost six months after the U.S. and Israel launched the conflict in Iran, this so-called Operation Economic Outcast aims to marginalize the country even further. It includes measures to impose sanctions on any country or entity that deals with the government in Tehran. In a few minutes, we'll hear from an Iran expert on how that country's leadership might react.

1:15First, to understand what these sanctions hope to accomplish, we're going to hear from NPR diplomatic correspondent Michelle Kellerman and NPR White House correspondent Deepa Shivram. They spoke to Elsa Chang. All right, let's start with you, Michelle. What exactly are these new measures that Besant laid out today? Yeah, so he's warning banks and businesses that they're going to be cut off from the U.S. financial system if they continue to deal with Iranian oil and five new areas. Those are cryptocurrency, technology, gold, aviation, and shipping. Besant is calling on countries to shutter all branches of the Iranian bank, Melly.

1:51And he had some pretty tough words for countries that are allowing this kind of trade. He said the U.S. has mapped every node, every facilitator and every network that Iran uses to evade sanctions. Those were his words. And countries can't be blind to that. But, you know, Elsa, unlike the surprise D-Day landing in France during World War II, on this D-Day, the U.S. is giving countries a heads up about the sanctions that they could face. Take a listen to how Besant explained that. We are giving everyone the opportunity to remedy bad behavior. Why would I want to blow up the global financial system?

2:29And that was a real moment of honesty there about the risks of imposing sanctions on countries like China or other big trading partners of Iran. Yeah, let's talk about that deep because Chinese President Xi Jinping is going to be coming to the U.S. in about a month. Right. So does all of this risk reigniting tensions with China ahead of that meeting, you think? Yeah, I mean, Trump considers himself to have a good personal relationship with Xi and past meetings between Trump and Xi have ended mostly cordially. But on a global stage, there's a lot of economic pressure when Trump allows these tensions to build and it puts the global economy in a pretty fragile position like you guys remember last year's terrafore that was going on.

3:10And it's possible that tensions reignite because in response to economic sanctions like these, China would likely retaliate. But keep in mind, Trump has a history of making big statements or threats and then has a softened follow through, sometimes backing away entirely. He's done that repeatedly over the course of this war with Iran, right? He said he was going to obliterate Iran. He said that he had a deal to end the war. He's put a lot of options on the table. And now the option is economic sanctions. We'll see how the administration follows through here. But I think even threatening these sanctions against China adds to that tension.

3:44You heard from Besson himself that it really does threaten to have huge global impacts on the economy. Well, Michelle, what's been Iran's response to this economic D-Day? Well, the Iranians remain defiant, even though some Iranian leaders have admitted it's likely to inflict a lot more pain on the economy, which is suffering huge losses right now. Even before Besant's news conference, Iran's new security chief, Mohsen Rezaei, was warning that any country that helps the U.S. with these economic restrictions would be considered an enemy. And he warned that Iran would target their interests. He said that Iran would attack oil tankers trying to leave the Persian Gulf.

4:24Again, saying, quote, that not a single drop of oil will leave the region. So, you know, Iran seems to be ready to use this new leverage that it has over the Strait of Hormuz and will continue to fight back. Well, then what does that mean for U.S. allies in the Gulf? Not good news at all for Gulf allies. They've really borne the brunt of this war. They've been hit by Iranian drones and missiles. Their economies are suffering and they're really looking for de-escalation. Besant says that they now see that appeasing Iran hasn't worked. because they've been targeted despite appeasing Iran. Those were his words.

5:03Iran says it's targeting them because they house U.S. bases. So, you know, they're really in a predicament here. And to get ahead of these new sanctions, one country, the United Arab Emirates, last week announced that it would cut business ties with Iran. And that's a big deal since they have many. Right. Well, Deba, I'm interested in the timing of all this. Like, why are these measures being announced now a whole half year into this war? Well, yeah, half year, as in six months of a war that Trump said would last less than six weeks, right? He hasn't been able to bring this conflict that the U.S.

5:37and Israel started with Iran to a close. There have been negotiations, but Trump has been saying now that he thinks Iran is not ready to strike a deal. And in the meantime, the conflict is ongoing. Prices are still high. And there's an election coming up that he has to be able to explain something here to voters about this war and why it's still going on. Exactly. An election is coming up. So how much is President Trump actually talking about Iran on the campaign trail? You know, he mentions it often talking about how he really believes Iran can't have a nuclear weapon. I was just traveling with the president in South Carolina on Friday.

6:12And in this crowd in Myrtle Beach, he was telling supporters that as soon as the war with Iran is done, oil prices will come down. So he's acknowledging that there's some economic pain there, right? And there were big cheers from the crowd when he said that. So with just over two months until the midterm elections, he's really just got to provide some kind of progress report, some answers here. Because this war, according to polling, is really unpopular among voters, even among some of Trump's own supporters. And Trump's approval ratings on the economy are also not doing well. And, you know, back in March when this war was close to the beginning, I was talking to Republican strategists who would say, you know, Trump still has time.

6:48He can turn this around. Now, though, he's running out of time. And adding these economic sanctions is a way of possibly showing his supporters that he's trying to move the needle here. I will point out, though, Trump himself hasn't spoken about these new sanctions. He just did an event at the White House this afternoon, didn't mention Iran at all, which is kind of rare. But he did mention in a post on social media earlier that the U.S. is, quote, winning against everyone, including Iran. That is MPR's Deebis Shivram and Michelle Kellerman. Thank you to both of you. Thank you. Thanks for having me.

7:20For more on how Iran might respond to this move, Leila Faddle spoke to longtime Iran watcher Kareem Sajidpour. He's a senior fellow at the Carnegie Endowment for International Peace. What Scott Besson, the Treasury Secretary, has laid out, Leila, is essentially, in his own words, the most punishing sanctions ever to be inflicted on a nation. And to essentially force countries around the world to make a simple choice, and that is, do they want to do business with Iran or do they want to do business with America? Because America won't allow both. The big question here, Leila, is for China, because around 90 percent of Iran's oil exports are bound for China.

8:04China is by far Iran's most economic partner. And the question is whether the United States will pick a major fight with China over these Iran sanctions. Could this backfire? I mean, you're seeing Iran's national security advisor threaten U.S. allies who join the economic restrictions that this would be committing an act of war. Then you're seeing Trump on social media last week threaten tremendous economic consequences if any country provides what he'd call the lifeline to Iran. So how will world leaders regard kind of a double threat here? So on one hand, Leila, from 1979, from the 1979 Iranian Revolution to the present, this is a regime which really is only compromised on two major occasions.

8:48And that is when it's been faced with enormous, almost existential economic pressure, coupled with a clear diplomatic exit. But we're now in unprecedented times. We're basically in a time of war when Iran has been launching thousands of attacks on its Gulf neighbors. And so the question is, how are those countries, how is Iran going to respond when it's faced with this new economic D-Day? Is it simply going to sit on its hands or launch massive strikes on its neighbors? The fear is the latter, that they are going to punch back hard. And then the question is, what does the United States do in that context?

9:27Well, in that vein, OK, so the U.S. levies even tougher economic sanctions. And then there's going to be an Iranian reaction or Iranian government reaction. But then to what end? From what you can tell, does the U.S. have a clear endgame in Iran after it does this? That is a critical question, Leila, because, as I said, from the revolution to the present, the regime has compromised on a couple occasions when faced with pressure, but has also provided kind of a clear, concrete diplomatic exit. In this context, what we've seen and read from Secretary Besant is essentially a U.S. pressure campaign to potentially implode the Iranian regime.

10:09And this is a regime which has 100 % resolve because it knows that if it loses power, that could be the end of their lives. And so for that reason, it's a regime which is totally dug in and willing to subject its population to enormous hardship rather than to capitulate. I mean, then what does this mean for Iranians? Because not only did they suffer the backlash against protests where thousands of people were killed before this war, and then suffered U.S. bombing, a more extreme regime as a result, a more paranoid regime and backlash, and now will go through even more economic pressure. What does this mean for Iranian people?

10:52Well, 2026 has been a terrible year for the Iranian people, Leila. As your reporter alluded to, in January, there was mass uprisings in which the regime killed potentially tens of thousands of its citizens. The last six, seven months of war have brought enormous hardship. And they're squeezed between a brutal regime and a war which has made that brutal regime even more violent towards them. And it's only increased their economic hardship. And there's not really any precedent, certainly in Iran, of a popular uprising, you know, leading to, I'm sorry, economic pressure leading to popular uprising, which changes the nature of the regime.

11:38Is there some threshold of economic pain that if crossed will force Iran to negotiate, even if there isn't a diplomatic option? As you've pointed out, that's only been the times they've compromised. I think the short answer to that is yes, that ultimately this regime wants to survive. And when it fears its existence is at stake, it's prepared to compromise. The big question is there seems to be a big gap between the Revolutionary Guard generals running the country and the running civilians who understand the regime's hardship. That's Kareem Sajidpour speaking to NPR's Leila Faddle.

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