Image source, EPA
Nearly six months after United States President Donald Trump declared an imminent victory against Iran, hostilities between the US and Iran remain unresolved. Military victory or a negotiated settlement appears increasingly unlikely in this ongoing conflict.
To end the stalemate, Trump has announced an ‘Economic D-Day,’ warning that any country conducting trade with Iran will face “serious” economic repercussions.
Iran has long endured various sanctions, and it appears prepared for severe economic hardship and military resistance should the conflict extend.
With other strategies faltering, the effectiveness of imposing additional sanctions remains a critical question for the United States.
What the US Aims to Achieve
The full range of options the US may deploy in its pressure campaign is not yet entirely clear. However, US Treasury Secretary Scott Bessent is scheduled to address the topic in a press conference on August 24.
In an interview with CNBC, he stated that any country, ally or adversary, providing assistance to Iran could face sanctions.
“You’re either with us or with them,” he asserted. “If you trade with Iran, send money, buy oil, or smuggle goods by sea, the US Treasury and government agencies will use their full power against you.”
Former Vice President JD Vance described this as a “new phase” in the conflict, highlighting economic pressure as the most effective tool available.
Vance said on ‘The Clay Travis & Buck Sexton Show,’ “They will try to pressure us economically too. But in recent weeks, they have experienced more pressure than we have.”
Since becoming an Islamic Republic in 1979, Iran has faced harsh economic sanctions from the US.
The pressure increased significantly after Trump withdrew the US from the 2015 Joint Comprehensive Plan of Action (JCPOA) agreed upon by world powers and Iran.
Currently, the US has launched ‘Operation Economic Fury,’ involving two key strategies: restricting financial flows to the Iranian regime and imposing a naval blockade on Iranian ports.
Expert Opinions on the New Sanctions
Image source, ISNA/WANA/REUTERS
Imran Bayoumi, a geopolitical expert and former defense advisor affiliated with the Atlantic Council in Washington DC, suggests that such announcements may stem from mounting frustration due to the failure of other strategies to produce desired results.
“It is an admission that America is mired in this war,” he said. “This is simply another attempt at economic pressure.”
“The US administration has shown no clear strategy among economic and military tools. The objective remains unclear.”
Michael Parker, a sanctions expert and retired official from the Office of Foreign Assets Control, views the campaign as an attempt to expand sanction effects.
He explained that tertiary countries trading with Iran and reliant on the US dollar for their economies could become targets.
“US sanctions have mostly operated through second-tier sanctions affecting foreign financial institutions,” he said.
“However, targeting entities connected to the US dollar system and trading with Iran is a new approach being employed for the first time.”
Parker also noted that foreign financial institutions aiding Iran to evade sanctions or funnel money to the Iranian government might come under enforcement action.
How Feasible Is It to Prevent Iran From Evading Sanctions?
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Though Iran’s response to these measures is uncertain, sanctions experts agree Tehran has demonstrated adeptness in evading restrictions through alternative and irregular channels.
Among the methods used are disguised oil tankers and other commercial entities not yet under sanctions.
Mohammad Hammuda, Manager of Export Controls and Sanctions at the London Stock Exchange, notes, “Iran quickly prepares new identities and trades under different names, continually discovering new ways to evade sanctions.”
He stresses the need for enforcement bodies to take a more proactive approach in pinpointing these major targets.
“Sanctions exist on paper but enforcement is difficult,” Hammuda remarks. “Teams worldwide are dedicated to investigations and locating involved parties, which is why Tehran struggles.”
Ultimately, the efficacy of these sanctions depends heavily on the cooperation level of targeted countries. Responses from US partners including Turkey, Iraq, and China will be particularly significant.
“Some dynamics are beyond Iran’s control,” Parker said. “How effectively Iran can evade sanctions depends greatly on the actions of other countries and financial institutions.”
According to Parker, new sanctions will determine the balance of power in the region and the extent to which targeted countries comply with US foreign policy and dollar-based trade restrictions.
Many experts remain skeptical that such cooperation will materialize.
Imran Bayoumi comments, “In my view, China is unlikely to agree. These nations are balancing their interests carefully with the Trump administration.”
“This is just another measure. The main question is the broader strategy. Without a clear strategy, its long-term impact will be limited.”
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