‘There is no breaking point’: The problem with Trump’s plan to economically strangle Iran

President Donald Trump is waiting for Iran to cave to his economic pressure. Tehran may be willing to wait even longer. Even as Treasury Secretary Scott Bessent promises a level of economic isolation “never seen before,” former Trump administration officials, U.S. ambassadors and other Middle East experts are skeptical that tightening the economic vise will force Iran to relinquish its desire to toll ships passing through the State of Hormuz and make the other concessions Trump is demanding to bring an end to the war. “It’s an attrition campaign, and I am sure Treasury tweaks this or that to fill gaps or expand coverage of sanctions,” said James Jeffrey, a former ambassador who served in the Middle East during three presidential administrations, including Trump’s first term. “But, it’s hard to believe [there will be] something decisive after 20 years of U.S. sanctions and Iranian experience of going around them.” It’s an acknowledgement that underscores the asymmetry of the situation. The Trump administration is staring down a consequential midterm election amid an unpopular war that has sent oil prices back up to roughly $90 a barrel and helped push long-term borrowing costs to their highest level in nearly two decades as hope dims that a peace deal is near. Iran’s leaders, meanwhile, see the conflict as existential, giving Tehran reason to absorb the extraordinary economic pain rather than accept terms it believes could imperil the regime — especially as U.S. inflation remains elevated and treasuries sell off. The yield on 30-year U.S. government bonds, a figure Trump has in the past been attuned to, jumped on Tuesday to its highest level since just before the global financial crisis. The increase in the yield to its highest level in nearly two decades isn’t solely because of the six-month war; global fuel shortages and broader instability have kept energy prices higher for longer, increasing the threat of persistent inflation. And that’s heaped even more risk on global bond markets that have repeatedly blanched at Trump-related shocks. “We are in a situation where we’re spending more and more to finance more and more,” said Julia Coronado, founder of MacroPolicy Perspectives. And the war has created “a riskier world full of more frictions, full of more supply shocks.” Iran’s outsized incentive to muscle through the pain is partly why some former administration officials doubt that the naval blockade, while unprecedented in its scale in the modern era or whatever new strategies Bessent may unveil, will change Iran’s calculus. “I think the economic pressure would need to hit them in new ways we haven’t seen so far to change the mindset of the regime,” said one former Trump administration official, granted anonymity to candidly assess the impact of the U.S.’s economic pressure campaign. The administration has yet to indicate what further action it plans to take, but options include going after major Chinese banks that facilitate Iran’s oil trade, expand secondary sanctions on countries doing business with Iran and confiscating Iranian assets under U.S. jurisdiction instead of just freezing them. Iranian leaders publicly mocked U.S. efforts to sanction them into submission. “Americans think squeezing Iran harder will win concessions that were never part of the agreement,” Mohammad Bagher Ghalibaf, the speaker of Iran’s parliament, posted on X Tuesday. “Bessent and [Defense Secretary Pete] Hegseth are way out of their league,” he wrote. “Stop waiting for the clown crew to pull a rabbit out of their hat and clean up the mess you made.” White House aides, however, continue to contend that the leverage is on its side. “The crushing sanctions and one of the most successful blockades that have crippled Iran’s economy and has left Iran completely broke,” said one administration official, granted anonymity to share the U.S.’s thinking. “There are many levers the president can crank harder in the weeks and months ahead.” In the half-yea