Trump Readies a New War on Iran’s Economy
The Trump administration’s increasingly aggressive military posture toward Iran is overshadowing its more concrete plans for crippling the regime in Tehran: a set of robust new sanctions to add to its economic warfare campaign.
Senior professionals inside the administration, who have been crafting Iran policy since before President Trump’s inauguration, are considering another sanctions package designed to destabilize Iran, undermine that country’s leadership, and, potentially, serve as an alternative to military action. Among the proposals being looked at are sanctions that would effectively blacklist certain sectors of the Iranian economy, including the petrochemical sector, according to two individuals with direct knowledge of the conversations.
An aggressive sanctions strategy isn’t a new tactic for the president. Since Trump took office, the administration has slapped sanctions on nearly 1,000 individuals and entities to tighten the screws on Tehran. But the latest round of proposed sanctions would make it even more difficult, if not legally impossible, for many other countries or companies to do business in some of Iran’s most significant business sectors.
A Treasury spokesperson told The Daily Beast on Wednesday that the department doesn’t comment on future sanctions actions.
The new sanctions approach comes at a time of increasingly tense U.S.-Iran relations. Over the past week, the Trump administration has rushed B-52 bombers and warships to the Middle East, discussed a plan, as reported by The New York Times, to send up to 120,000 troops to the region, and ordered the partial evacuation of the embassy in Baghdad. Those moves have come in response to what National Security Adviser John Bolton and others have portrayed as a new, mysterious Iranian threat, with officials leaking claims of Iran attacking Saudi oil tankers and the State Department saying last week that there was “heightened Iranian readiness” to conduct operations against the U.S.
The statements have increased the likelihood of a direct, or even inadvertent, confrontation. And lawmakers, fearful of such an outcome, have called for more briefings from the administration on Capitol Hill.
While the White House has shied away from saying publicly that it supports regime change in Iran, experts and allies of the Trump administration who spoke to The Daily Beast say an extreme sanctions regime, if executed correctly, could effectively provide that outcome if economic conditions were poor enough.
“Like the Reagan administration viewed the Soviet Union, this administration views the regime in Iran as one day destined for the ash heap of history,” said Mark Dubowitz, chief executive of the Foundation for Defense of Democracies, a Washington, D.C., think tank that has been vocal in its opposition to the Tehran government. “But regime change is not the official policy of the U.S. government, though it appears more and more to be the aspiration of the Iranian people.”
Dubowitz said he and his team have met with the administration over the last week about the rising tensions between the U.S. and Iran.
Team Trump’s aggressive sanctions strategy was first developed during the 2016 presidential campaign, during which Trump advisers were sharply critical of the Obama administration’s landmark nuclear deal and eager to punish Iran for what it viewed as destabilizing regional activity.
During the presidential transition, Saudi Arabia sent an official to New York to meet with Trump officials about regime change in Iran. As The Daily Beast previously reported, General Ahmed al-Assiri spoke to then Trump national security aide Michael Flynn and others about an approach to regime change that included economic, information, and military tactics for weakening the Tehran government. Months later, George Nader, a Lebanese-American emissary to the UAE and Saudi Arabia, pitched American officials on a plan to carry out economic sabotage against Iran, as The New York Times reported.
Throughout this process, the Foundation for Defense of Democracies has played an advisory role. The organization’s senior counselor John Hannah worked on the State Department’s transition team, and other members have worked with the administration on Iran policy.
Trump ultimately pursued a highly aggressive sanctions regime while staying within the nuclear deal framework. But in the spring of 2018, he announced that the U.S. would back out of the pact even as international experts had concluded that Iran was abiding by the terms of the agreement.
As Trump has ratcheted up sanctions on Iran, he has also brought into his administration some of the foremost anti-Iran hawks in Republican politics, chief among them Bolton. The moves have sparked fears of more direct military confrontation—fears that have been amplified during the past week. But Trump himself remains privately averse to military action, fearful that it would have potentially damaging consequences on the U.S. economy.
In several instances over the past two years, when senior administration officials have briefed Trump on Iran and the situation in the region, the president has expressed concerns about the potential impact that rising tensions could have on oil markets, according to two people familiar with his private comments. In raising this to senior officials, Trump has suggested that a major clash between Iran and the U.S. could create a ripple effect that erases domestic economic gains that the American public has enjoyed in recent years—gains for which Trump has taken credit and that he hopes to run on in the 2020 election.
The president and his top advisers have continued to keep military action as an option, with the president issuing vague threats to the Islamic Republic over Twitter. But Trump has also continued to publicly flirt with the possibility or brokering a new nuclear agreement with Tehran.
“I hope to be able at some point, maybe it won’t happen, possibly won’t, to sit down and work out a fair deal,” he insisted while speaking at a rally in Florida early this month.
“We’re not looking to hurt anybody,” Trump said, even as his administration continued weighing and reviewing plans for troop deployments and devastating sanctions.
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