Amirhossein Arabpour – Expert at the Economic Diplomacy Think Tank

Following America’s failure to achieve its objectives through military means against Iran, Donald Trump has once again turned to the instrument of economic pressure, announcing last week the implementation of what he called an “unprecedented economic operation” against Iran. It appears that Washington, after defeat on the military field, is attempting to force Tehran to retreat by intensifying economic pressures. However, Iran has gained extensive experience over the years in confronting sanctions and has developed mechanisms for sustaining foreign trade, circumventing financial restrictions, and expanding cooperation with non-Western partners. The main question is whether “unprecedented pressure” differs from “maximum pressure” and what the strategy for confronting it should be.

Unprecedented Pressure; Synonymous with Old Sanctions and Pressures

Since the third war of aggression, Trump has undertaken various moves and has made new claims every day, including the destruction of Iran’s political structure and the eradication of Persian civilization, none of which have achieved their objectives. Iran has been subjected to numerous sanctions over the past three decades. For a country that has experienced this volume of sanctions, “unprecedented economic pressure” is a new name for the same pressure that Obama called “crippling sanctions” and Trump termed “maximum pressure.”

Given the Islamic Republic of Iran’s experience with primary and secondary US sanctions, it is unlikely that merely a new name for pressure will have decisive consequences. What matters is the extent of other countries’ alignment with this policy. China, Russia, and some other countries will not necessarily be willing to fully cooperate with Washington and will pursue their own economic and strategic interests in their relations with Iran. Therefore, if the United States cannot build a global consensus for economic pressure against Tehran, Trump’s “unprecedented economic operation” could face the same failure as his military campaign.

The US administration’s intention is to restrict Iran’s trade not only at sea but also on land, and Trump’s envisioned campaign is a comprehensive and isolating blockade of Iran. This blockade includes pressure on neighbors to cut land connections, restrictions on financial exchanges, and political isolation as well. Trump believes that a naval blockade will yield results over the next few months and currently has no intention of abandoning this tool. It is likely that during the “unprecedented pressure” phase, he will attempt to pressure other countries, especially neighbors, to compel them to cut economic ties with Iran.

Fundamental Strategies for Countering Trump’s New Economic Warfare

How to confront economic warfare is not complicated, and it can be managed using past strategies and experiences. Four main axes of action in this regard are as follows:

1- Active and accelerated economic diplomacy

The antidote to a comprehensive and isolating blockade is active economic diplomacy. This diplomacy must be institutionalized beyond the Ministry of Foreign Affairs, across all executive bodies. Consultations with important trade partners, including China, Russia, and neighboring countries – which are the most important export destinations and import origins – should be placed on the agenda as quickly as possible and with priority.

China, as the largest buyer of Iranian oil and a strategic trade partner, is the most important variable in the economic pressure equation, and has clearly stated that it is not willing to go along with Trump’s policy. Russia has also opposed Trump’s decision. Leveraging the North-South Corridor, banking cooperation and currency exchanges, and coordination in organizations such as BRICS and the Shanghai Cooperation Organization are capacities that can be strengthened through active diplomacy. Iraq also supplies many of its needs, including electricity, gas, food, and basic commodities, from Iran, and full alignment with Trump’s decision would be problematic for it. Nevertheless, Iraq has always faced the challenge of US pressure and meeting its vital needs, and through smart diplomacy, this country must be kept within the orbit of cooperation with Iran.

2- Activating alternative routes and diversifying supply chains

Alternative routes must be immediately activated and obstacles to diversifying supply chains removed. These routes include the North-South Corridor to connect southern ports to Caspian ports and then to Russia and Europe, the East-West Corridor through Afghanistan and Pakistan to China and South Asia, and the development of northern ports such as Amirabad, Nowshahr, and Anzali for the entry of essential goods from Russia and Central Asia. The use of non-dollar currencies such as the ruble, yuan, and rupee should also be expanded to reduce dependence on the US-controlled financial system.

3- Increasing societal resilience

Societal resilience must be increased through various initiatives. America’s current war against Iran is a war of wills and resilience. The United States wants to blockade Iran and ultimately force it to surrender; countering this is a priority.

Managing the currency and essential goods market to prevent severe fluctuations and volatility, fair distribution of subsidies and support for vulnerable groups, public information and opinion management to strengthen psychological and social resilience, and strengthening domestic production of strategic goods such as medicines, food, and industrial components are essential measures in this area.

4- Breaking the naval blockade

Although Iran has partially managed to reduce the impact of sanctions through various means and keep the country running, the naval blockade must be broken by any means possible.

A naval blockade, especially in the Strait of Hormuz and the Sea of Oman, can severely disrupt oil exports and imports of essential goods. Unlike financial sanctions, which can be circumvented to continue trade, a naval blockade means halting ship traffic and the exchange of goods.

Conclusion

The United States has entered a new economic war with Iran at a time when it has been defeated on the military front and its traditional allies have little inclination to go along with unprecedented pressures. Many countries have come to know Trump’s character and understand that his decisions are not sustainable; therefore, regional countries and Iran’s trading partners will likely assess his threats with caution.

Nevertheless, the Islamic Republic of Iran, by drawing on four decades of resistance experience, active diplomacy with key partners, increasing societal resilience, and, if necessary, the use of offensive military instruments, can also manage this new pressure.