Trump’s Economic Strategy Against Iran Faces Challenges
181 days into Operation Epic Fury, the Trump administration shifted towards a ceasefire by day 38. Attempts using military and diplomatic power to end conflict with Iran were unsuccessful. The resilient Islamic Republic of Iran resisted these efforts. The Trump administration then focused on economic sanctions, reinforced by a naval blockade on the Strait of Hormuz. Last Wednesday, on Truth Social, President Trump announced an ‘Economic D-Day,’ pledging to impose ‘economic warfare and isolation on an unprecedented scale’ against Iran.
Treasury Secretary Scott Bessent emphasized that both allies and adversaries would be expected to rally against Iran. He claimed, ‘This is going to be the greatest coordinated economic isolation in history. You are either with us or against us.’ However, Iranian Foreign Minister Abbas Araghchi dismissed these actions as distractions that would backfire. China remarked that U.S. sanctions and pressure would not solve the Iranian conflict. Foreign Ministry spokesman Lin Jian stated, ‘All relevant parties need to take responsible measures and resolve the problem through political and diplomatic means.’
The White House struggled to identify key figures within Iran’s regime. Attempts included negotiations with Foreign Minister Araghchi and Speaker Mohammad Bagher Ghalibaf and backdoor discussions with Maj. Gen. Ahmad Vahidi of the Revolutionary Guards. Yet, speculation arose whether Trump’s ‘Economic D-Day’ was merely a smokescreen for regime change. Since the start of Operations Epic Fury and Roaring Lion, regime change has been a target. Trump and Israeli Prime Minister Benjamin Netanyahu expressed this desire publicly, with Trump addressing it in a February 28 speech and Netanyahu on March 13. The objective was to rally the Iranian populace to take back their country.
The removal of the Supreme Leader and his advisors initially did not spur public uprising. Despite the degradation of Iran’s conventional military, the Islamic Revolutionary Guard Corps remained as the regime’s core, alongside the Basij paramilitary tasked with controlling domestic dissent. Trump’s military efforts ceased on day 38, shifting to negotiating with the remaining regime figures. However, new faces were steadfast in maintaining the status quo. This led to a so-called ‘forever ceasefire’ and renewed attempts to broker a deal.
A 14-point memorandum materialized, initiating a 60-day ceasefire that failed largely due to internal discord in Iran. Hardliners were unwilling to concede the strategic Strait of Hormuz or abandon uranium enrichment and nuclear ambitions, using the strait as leverage. The Iranian regime regarded the situation as non-threatening with priorities focused solely on survival rather than citizen welfare.
With negotiations stalled, Trump’s team sought alternative strategies. Hesitant to undertake nation-building, Trump was wary of Colin Powell’s counsel to President Bush prior to the Iraq conflict, suggesting responsibility falls on those who dismantle a regime. Trump’s reluctance stemmed from observing outcomes in Iraq and Afghanistan. He preferred negotiating over regime dismantlement, hopeful for internal upheaval.
In January 2026, a sweeping uprising occurred in Iran, spurred by economic discontent starting from Tehran’s Grand Bazaar. Protests expanded to over 400 points nationwide, calling for an end to the Islamic Republic. The demonstrations were fueled by severe economic distress and currency collapse. The Iranian rial plunged to its lowest against the U.S. dollar, exerting pressure on merchants and citizens. The regime’s harsh crackdown ensued, involving internet blackouts, mass arrests, and civilian casualties. This prompted the launch of Operation Economic Outcast, with the rial’s value plummeting further as trade opened. The question now arises: Is recreating these economic conditions intended to incite regime change?
The concept of setting the stage is different from having actionable plans to exploit those conditions. Utilizing national power tools effectively requires synergy. Has the White House grasped this strategy? Retired Colonel Jonathan Sweet, with a 30-year career in military intelligence and experience leading the U.S. European Command Intelligence Division, along with national security writer Mark Toth, pose this question. They co-founded INTREP360 and its Intelligence Report on Substack. Copyright 2026 Nexstar Media Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.