President Trump eyes ‘crushing’ economic blockade to bring Iran to its knees

As the conflict with Iran nears its six-month anniversary, President Donald Trump has traded bombs for a comprehensive economic blockade of the Islamic Republic, hoping to strangle the regime by cutting off its economic lifelines.

This week, the president — frustrated with the Iranian leaders’ failure to agree to a deal to settle the conflict that includes ending the country’s illicit nuclear program — vowed to significantly ramp up the United States’ campaign to crush the Iranian economy. 

Trump: "Tremendous economic circumstances"

On Wednesday, Trump announced the "most crushing economic operation ever taken" against the Iranian regime that would target Iranian enablers, or any country “that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran.” 

“Those countries will face TREMENDOUS Economic Consequences,” the president said in a post to Truth Social. “Oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies — It all needs to stop NOW. You know who you are,” Trump warned. 

Treasury Secretary Scott Bessent elaborated further on the president’s goal. “[W]e are going to collapse this regime,” he said on Thursday in an interview with CNBC. 

Strangling Iran

Victoria Coates, Vice President of Heritage’s Kathryn and Shelby Cullom Davis Institute for National Security and Foreign Policy at the Heritage Foundation, told Just the News that the president’s self-described “Economic D-Day” strategy began to take shape in April, when he first imposed a naval blockade on Iran’s ports and in the Strait of Hormuz, seeking to strip Iran of smuggled oil revenues it was using to fund its fight against the U.S. military. 

“There was a major shift in April when the president decided, you know what, we're going to blockade them. We're not going to let them hold us hostage over the Strait of Hormuz. We're going to hold the Strait of Hormuz hostage. We're going to see who comes in and out,” Victoria Coates told the Just the News, No Noise TV show.

“And Iran wasn't prepared for that. So, they were expecting they could still get out about 750,000 barrels [of oil] a day, they could still get in their critical imports, and that's really important. Most people don't appreciate this because Iran hasn't invested anything in their own economy. They're heavily dependent on imports. We cut all that off, and so slowly over the summer, … we're just strangling them,” Coates said. 

UAE cuts trade with Iran

The president’s latest announcement outlines a plan to go even further by targeting the countries that are supplying so-called lifelines to Iran. Just a day before the president’s announcement, the United Arab Emirates announced that it would suspend all trade and financial transactions with Iran after the regime allegedly fired a missile at the UAE. The United States has for weeks been encouraging the UAE, which is a close ally, to crack down on the Iranian finance networks in the country. Tehran has long used the UAE as a conduit for financial and trading networks designed to circumvent international sanctions.   

“The big move  [...]by the UAE to cut them off from Dubai, from any kind of commerce with the international financial markets, is huge, and I think that's just going to continue on, and nature will take its course,” Coates said. 

Aside from being a major trade partner of Iran before the war, the UAE has served as an intermediary for Iranian exports and financial exchanges in the global market, to which Iran’s access has been heavily restricted under sanctions regimes. U.S. government sanctions on Iranian regime-linked targets frequently include individuals based in Dubai, the UAE’s largest city. For example, the U.S. sanctioned companies and individuals in the UAE for their roles in a petroleum smuggling network linked to the Yemen-based Iranian proxy group, the Houthis.  

Widespread effects of "Economic D-Day"

In June, the U.S. Treasury Department unveiled sanctions on the personal banker of Iran's new Supreme Leader Mojtaba Khamenei, targeting his network of assets abroad that benefit the country's most senior leadership, Just the News previously reported. The banker, Ali Ansari, is an Iranian national who lives abroad in Dubai, where he has used his ties to the Iranian regime to embezzle government funds and amass "a global network of investment properties and financial holdings," according to the U.S. government. 

China, Iran’s largest trading partner, would also face actions from the United States if President Trump imposes his “Economic D-Day.” China has purchased the vast majority of Iranian oil for years, even while its exports are under international sanctions. Chinese banks and front companies help Iran with oil transactions to avoid the sanctions and operate ships in a shadow fleet to transport the sanctioned oil, according to the U.S.-China Economic and Security Review Commission. China has also sold Iran the technology and inputs required to construct its fleet of attack drones and missiles. 

China Treasury Secretary Bessent on Thursday urged Beijing to “get with the program” and support the United States’ planned economic blockade. He cited China’s dependence on Middle East oil imports as a reason to get behind ending the conflict, indicating that the Chinese could face consequences if they continue to back Tehran. The issue of Beijing’s support for Iran during the war remains sensitive ahead of Chinese President Xi Jinping’s planned visit to the United States in September. 

China not taking the bait

However, Chinese foreign policy experts believe that the Trump administration’s threats are empty. “This threat reveals how desperate the Trump administration has become on the issue of Iran,” Wu Xinbo, an American studies scholar at Fudan University in Shanghai and who serves as an advisor to the Chinese Foreign Ministry, told The New York Times. “They issue this threat, not because they think it is workable, but because they have no other options.” 

Chinese Foreign Ministry spokesman Lin Jian said on Friday that “sanctions and pressure” will not bring the conflict to an end. “China calls on all relevant parties to take responsible measures and resolve the problem through political and diplomatic means,” he said.

“China opposes illegal unilateral sanctions that have no basis in international law and are not authorized by the UN Security Council,” Lin added.  

President Trump's plans to ramp up economic pressure on Tehran stem from the belief that Iran’s beleaguered economy cannot take many more hits before the regime's internal system begins to break down, but it remains to be seen just how much pressure the country can withstand. Iran’s economy was already in dire straits before the initial U.S. strikes in February. 

Iran’s economy was suffering from persistently high inflation, the collapse of its currency, and declining agricultural production after years of drought, Just the News previously reported. The economic instability fueled the largest round of anti-regime protests in recent Iranian history which brought the Islamic Republic to the brink of political collapse. Only a violent crackdown by loyal security forces ended the wave of demonstrations.

More recent reporting indicates that unemployment in the country is soaring, inflation is still running out of control, and those that do work are struggling to afford necessities like food and medicine in the midst of the conflict with the United States.