Iran has no breaking point — and Trump's economic isolation strategy may be failing

Although the United States has shifted strategy by vowing to tighten economic sanctions against Iran across the board, analysts say the approach is unlikely to work because Iran's leadership is willing to endure the pain.

Politico, citing assessments from Middle East experts, reported Tuesday that Washington's campaign to economically isolate Iran will not be enough to extract concessions or bring the war to an end.

James Jeffrey, a former ambassador to the Middle East region, called the situation "a hellish war of attrition." He said the Treasury Department is trying to close loopholes and broaden the reach of sanctions, but that "a decisive blow is hard to land given Iran's two decades of experience living under sanctions and finding ways around them."

Politico noted the unfavorable conditions facing the Donald Trump administration — rising oil prices, US government bond yields near a 20-year high, and midterm elections on the horizon. Against that backdrop, Politico said Iran's leadership views the war as an existential struggle for the regime's survival. Rather than accept US terms for ending the war that could threaten the regime, Iran's leaders are expected to absorb severe economic hardship instead.

Julia Coronado, founder of the macroeconomic consulting firm MacroPolicy Perspectives, said the United States "has to spend more and more money to cover growing fiscal needs," adding that the war "has made the world more dangerous, full of friction and supply shocks."

Iran is itself suffering sharply — explosive inflation and economic hardship have taken a heavy toll on ordinary people under the intensified US sanctions. But those who have negotiated with Iran say the pressure falls far short of what would be needed to bring the regime to its knees.

Ali Vaez, deputy director of the Middle East program at the International Crisis Group, acknowledged that Iran is under undeniable economic strain. "The question is whether there is a breaking point," he said. "For a regime that is fighting for its life and has shown no hesitation in passing economic suffering onto its people, I don't think a breaking point exists."

Politico reported that White House aides still insist the upper hand remains theirs.

One official said "crippling sanctions and one of the most successful maritime blockades" have paralyzed the Iranian economy and left the country "completely bankrupt," adding that "the president still has many levers he can pull harder in the weeks and months ahead."