Berliner Tageblatt - Trump pledges 'economic warfare' on Iran, prompting Tehran derision

The war between the two countries, started by the US and Israel in February, appears stalemated, with peace talks stalled, Tehran keeping the key Strait of Hormuz shut and Washington persisting with a naval counter-blockade of Iran.

Under pressure at home over the economic impacts of this unpopular war and with midterm elections looming, Trump appeared to be searching for alternative ways to pressure Tehran.

In a post on his Truth Social, the US leader said he was announcing "the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY! This will be Economic Warfare and Isolation on an unprecedented scale".

"ANY country that allows its financial institutions, businesses, airports, or government entities to provide any type of lifeline to Iran will itself face TREMENDOUS Economic Consequences," he said.

The US has maintained punishing sanctions againstIran for decades, with Trump in his 2017-2021 first term ratcheting them up as part of a "maximum pressure" strategy in which he tore up a nuclear deal negotiated by his predecessor Barack Obama.

Iran's Foreign Minister Abbas Araghchi on Thursday dismissed the plan as a continuation of "failed policies", which he said would bring Washington "further defeat".

"The so-called 'Economic D-Day' is a diversion from America's own crisis: unprecedented debt & surging interest costs. Doubling down on failed policies will only bring further defeat -- and enmity of Iranians," Araghchi said in a post on X.

"US economic terrorism threatens global economy and sovereignty worldwide."

- 'Oil smuggling' -

Despite the heavy international sanctions, Iran found ways to continue exporting its oil, with China the biggest buyer.

In his threat to those helping Iran, Trump did not mention any country by name, nor did he say what punishment third countries might face, although last August, the US slapped an additional 25 percent tariff on India for buying Russian oil.

The US leader listed several activities that he said needed to stop immediately: "oil smuggling, swap lines, cash transfers, exchange houses, ship registries, front companies".

Like Russia, Tehran operates a so-called shadow fleet of tankers, all of which are under international sanctions, to continue its oil trade.

It's unclear what additional impact any fresh sanctions would have, given the US blockade of Iranian ports.

Tehran, though, continues to exert its own economic pressure campaign by keeping the strait of Hormuz largely closed. Before the war, around a fifth of global oil supplies travelled through the strait.

Attacks on shipping in Hormuz have continued, despite the lull in the wider war, while on Wednesday Iran's Revolutionary Guards warned Gulf countries against assisting the US.

That came after the United Arab Emirates said it was severing economic ties with Tehran over attacks on its shipping.

- 'Diplomacy is doomed' -

While it has been several weeks since the last round of tit-for-tat strikes, Iran has taken a more confrontational stance say analysts.

Ahmad Zeidabadi, a Tehran-based international relations expert, told AFP the shift reflected Iran's assessment of Washington's intentions.

"The Islamic republic believes the United States has likely ruled out war and now seeks to perpetuate the status quo including the US naval blockade and the economic pressure," he said.

He said the "Iranians believe that diplomacy is doomed to fail in the current climate" and that "they may feel compelled to resort to offensive action to force the US to accept Iranian conditions".

The tougher stance was also reflected in Iranian supreme leader Mojtaba Khamenei appointing a number of hardliners to senior security positions in recent weeks.

"These appointments are demonstrative of Iran believing it will be in a wartime footing for the foreseeable future," said Jason Brodsky, policy director of the US-based United Against Nuclear Iran think tank.

The war has also continued to spread, sucking in and reigniting Yemen's smouldering civil war. On Thursday, the Revolutionary Guards warned that Saudi Arabia would not be able to contain Tehran's allies, the Houthi rebels.

The group, which controls swathes of Yemen and has been at war with Riyadh for over a decade, has declared a maritime blockade of Saudi Arabia and attacked ships in the Red Sea.

B.Shevchenko--BTB