Trump’s One-Two Punch to Knock Out Iran

For six months, the world’s attention has been fixed on the military campaign against Iran. American and Israeli aircraft have hammered missile facilities, air defenses, command centers, naval assets, and other parts of Tehran’s war machine.

But President Donald Trump is now delivering a second blow that could ultimately prove just as important as the first. While the U.S. military destroys Iran’s ability to wage war, the administration is attempting to destroy the economic engines that fuel Iran’s terrorist regime – and perhaps sow the seeds for the overthrow of the regime itself.

Treasury Secretary Scott Bessent put the objective in unusually stark terms this week. “We have zero tolerance,” Bessent said. “We are going to economically asphyxiate this regime.”

Bessent said the United States is tracking down overseas assets belonging to Iran’s Islamic Revolutionary Guard Corps, including offshore accounts and even luxury properties held around the world. Washington is also preparing additional sanctions against banks and companies that facilitate Iranian business, potentially cutting them off completely from the dollar-based financial system.

The administration formally launched Operation Economic Outcast on August 24, dramatically expanding the economic offensive. New sanctions authorities target five sectors Tehran relies upon to sustain its military apparatus – digital assets, technology, gold, aviation, and shipping.

At the same time, the Treasury Department sanctioned more than 60 individuals, companies, and vessels accused of helping Iran sell oil, conduct cyber operations, and acquire nuclear and missile technology.

“Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent declared.

That campaign is the second half of what is effectively a one-two punch against the Islamic Republic.

The first punch has been military. Although months of fighting have not forced Tehran’s surrender, U.S. and Israeli operations have inflicted severe losses on Iran’s military infrastructure and repeatedly targeted missile systems, radar installations, air defenses, launchers, and other strategic assets. During the latest round of fighting, Trump said American forces destroyed new Iranian military installations and struck radar and missile systems near the Strait of Hormuz.

“The first pillar was damaged but not fully destroyed,” a retired German diplomat involved in Middle East diplomacy, who requested anonymity, told me, referring to Iran’s military strength.

That distinction is important. Iran remains dangerous. It still possesses missiles and drones capable of striking American forces and regional allies, and Reuters noted last week that Tehran retains enough military capability to pose a significant threat. Since the start of hostilities, Iran has launched 6,700 drones and missiles.

But rebuilding what has been destroyed requires money, technology, components, transportation networks, and foreign partners. That is precisely what Trump’s economic offensive is now targeting, and there are signs the pressure is beginning to take its toll.

Reuters reported Thursday that Iranian oil exports have plunged from roughly 1.7 million barrels per day to about 260,000. Inflation is approaching 70 percent, the rial has fallen to record lows, and Iranian officials have admitted that methods used for years to evade sanctions and obtain foreign currency are becoming increasingly difficult to sustain.

Four economists from three countries interviewed for this column, including two central bankers, agreed that the sanctions pressure “could eventually collapse” Iran’s economy, although they cautioned that such a process “would take time.”

Iran has survived sanctions before, of course. For decades, Tehran has developed an elaborate shadow economy involving front companies, covert shipping, illicit financial networks, and other mechanisms designed to keep oil and money flowing.

Russia and China have been instrumental in building those networks, and Iran will rely on them to try to evade Western sanctions now as well.

The Caspian Sea has emerged as an especially important potential lifeline between Russia and Iran. Because no Western power borders the inland sea, Moscow and Tehran can move large quantities of cargo with considerably less risk of interception. Glen Howard, president of the Saratoga Foundation, described the route as “very stealthy and secure.”

Russia is also helping Iran rebuild militarily. The Financial Times reported this week that Moscow has secretly assisted Tehran in developing supersonic cruise-missile technology capable of threatening American warships in the Gulf.

But President Trump wrote on Truth Social this week that “I like our position now much better,” pointing specifically to Iran’s deteriorating economy. Then he asked a provocative question: “When are the Iranian people going to rise up and fight?”

Economic misery does not automatically produce revolution, and no one can know whether the Iranian people will ultimately overthrow the Islamic Republic. But Trump’s comments suggest that the ultimate goal of economic pressure may be political change.

A former Japanese diplomat interviewed for this column argued that Washington should simultaneously “tell the truth about the Iranian regime” and expose its treatment of its own population.

There is no shortage of examples. Iranian authorities recently upheld a 15-year prison sentence against photojournalist Yalda Moaiery for sending photographs of the regime’s violent repression abroad. Her case offers a reminder that Tehran must spend resources not only confronting its foreign enemies but also suppressing dissent at home.

That could ultimately be the power of Trump’s one-two punch. Military force can destroy missiles, launchers, radar systems, and weapons factories. Economic warfare can make them increasingly difficult to replace while simultaneously starving the regime of resources it needs to maintain control over its own population.

Neither strategy guarantees the Islamic Republic’s collapse. But Iran has rarely faced both forms of pressure at this intensity at the same time.

The bombs have received most of the attention. But the economic war may be what finally brings the world’s leading state sponsor of terror to its knees.