Will the "Economic D-Day" Bring Iran to its Knees or Will It Become Another Trump Foreign Policy Failure?

Treasury Secretary Scott Bessent at his August 24, 2026 press conference

Six months ago today, the United States and Israel mounted a surprise attack on Iran. During the first wave of the attack, Supreme Leader Ali Khamanei, was killed, as well as and many senior Iranian political and military officials. During the next few weeks, massive American and Israeli bombing destroyed Iran's air force, much of its navy and left many military installations in rubble. 

Despite the United States and Israel's massive military power, the Tehran regime is still in power and, in many respects, even stronger than before the February 28th attack. The prolonging of the war, which Donald Trump claimed would end in 6 weeks, shows no sign of ending. What then is the status of the conflict now in its sixth month?

In the latest chapter of the war with Iran, Donald Trump has said that he will wage an "economic D-Day" against Iran, namely impose a massive amount of sanctions designed to force the so- called Islamic Republic to capitulate. What exactly is this new policy and does it have any chance of bringing the current conflict to and end?

Aside from dishonoring the thousands of American troops who invaded France in June 1944 at a great cost of lives lost, the use of the term "economic D-Day" is both a misnomer and a gross exaggeration of what it claims it will accomplish.  Dubbed "Operation Economic Outcast" by Secretary of the Treasury Scott Bessent, who is in charge of imposing the sanctions, the strategy of forcing Iran to return to the negotiating table and accede to Trump administration demands are the goals. But how to actually achieve them is vague at best.

At Bessent's August 24th press conference where he outlined Operation Economic Outcast, it was already clear that the sanctions' threat was exaggerated. If it were to succeed, it was dependent on the cooperation of a wide variety of international actors. Bessent threatened to sanction any state which continued to engage in financial ties with the Tehran regime.

Bessent's press conference didn't make clear what the new sanctions regime was intended to achieve.  Was Iran's collapse the goal, its capitulation to Trump's demands, or a compromise which would provide an offramp for the United States, i.e., a reopening of the Strait of Hormuz?  Bessent's failure to make the objectives of Operation Economic Outcast clear was in keeping with the Trump administration's ambiguity about the outcome of the war with Iran.

The proposed sanctions regime If Iran's neighbors, Iraq and Pakistan, don't adhere to Trump's threat of sanctions, then that will already create problems for the new sanctions' impact. Iraq has been a source of dollars as well as a source of commodities for Iran through smuggling and money laundering. Because Iraq's pro-Iranian militia movement, the Popular Mobilization Forces (al-Hashad al-Sha'bi), depends on the financial ties with Iran, there is no reason to expect them to stop their smuggling operations now.  

Iraq is also dependent on Iran for energy supplies in the form of electricity and natural gas. It purchases 50 million cubic meters of natural gas per day and large amounts if electric power depending on the season . Through such purchases, Iran receives large payments which bolster its economy.  

As for Pakistan, it has made clear that it's not bound by the new US sanctions because it is a neutral party in the US-Iran conflict. Only if the United Nations declares that. the sanctions should be imposed will it then adhere to them.  Further, the United States and Pakistan have developed much closer ties under the Trump administration and high ranking Pakistani military and political officials have served as intermediaries for US-Iran negotiatins.

Given the weakness of Iraq's government, which is caught between competing pressures from the United States and Iran, it is highly doubtful if the Trump administration will sanction Iran.  With the Islamic State active in eastern Syria and parts of northwestern Iraq, the US would be ill advised to undermine its relations with Iraq. Because Pakistan retains its role as an important point of contact with Iran, sanctioning it won't happen either.  

Far more important for the imposing the sanctions is the reaction of  Russia, India and especially China.  After Bessent's press conference, the Chinese government indicated that it would not be bound by any United States sanctions. Even though China imports a considerable amount of Iranian oil, it is treated as an unofficial trading relationship. Iranian oil is off loaded near Malaysia to local tankers which then deliver it it to small "teapot" refineries along China's southeastern coast. 

Although China's imports of Iranian oil have declined form 1.2 to 1.4 million bpd to 534,000 bpd as of this month, the Beijing regime still seeks to have access to this oil because it is able to purchase it as a discounted price.  

Nor is President Xi Jinping keen to help Donald Trump extricate himself from the dilemma he faces in confronting Iran. The more time and effort the United States and its military forces need to devote to the Iran conflict, including maintaining the blockade of the Strait of Hormuz, the less time it has to monitor and push back at China's efforts to increase its power and influence in the South China Sea and the larger East Asian region.

Further, Xi is an authoritarian leader who need not worry about elections and public opinion. Trump's ill-conceived war with Iran has never been adequately explained to the American public.  In the first hours of the attack, the war's endgame was regime change.  The it became a narrative about Iran not being allowed to develop a nuclear weapon. More recently, the war's goals have been reduced to reopening the Strait of Hormuz, which was already open (and toll-free) on February 27, 2026.

Loss of domestic support for the war The "whiplash" effect of Trump constantly changing the discourse and objectives of the war has embarrassed the United States internationally and reduced its credibility as a global power.  Trump's multiple threats against Iran have largely proved to be empty ones. At the same time, his erratic behavior and the war's impact on the domestic economy have led a very large percentage of Americans to reject the war as an unnecessary expenditure of funds which should instead be used to improve the American economy. What Americans think about Trump’s handling of Iran, according to a new AP-NORC poll

It is also clear that the attack on Iran has undermined the United States' military readiness.It has used so many interceptors to shoot down Iran's large collection of cheap drones which have been directed at America bases in the Arab Gulf, and Jordan, and at a large number of other non-military facilities in the Gulf, wreaking extensive destruction. The war has demonstrated that using a $4 million Patriot missile to destroy an Iranian drone which costs between $35,000 and $50,000 to build represents a highly misplaced use of military expenditures Exclusive: US Patriot missile stocks in Europe are ‘beyond critical’ due to Iran war, officials say

In short, Operation Economic Outcast has made both Trump and Scott Bessent look foolish. Virtually, all analyses of the strategy argue that it is bound to fail.  The brutal Iranian regime needs to be toppled, but that can only be done through a coordinated International effort.  Saudi Arabia, the Arab Guf states, and the European Union would all need to become incolved

Unfortunately, Trump's narcissistic style of rule prohibits such as effort.  There is little reason to believe that when Trump leaves the White House in January 2029, the current conflict with Iran will still not have been solved.  In short, Trump's ill fated attack on Iran will certainly go down in the annals of American foreign policy history as one of the worst decisions any United States president has ever made.