Can Trump strangle Iran economically?

With the Trump administration set to announce details of what it calls a “crushing’ Economic D-Day campaign, James discusses on TRT World the president’s chances of success, including the likelihood of the campaign sparking a popular uprising. James also touches on China’s potential role as a spoiler of Trump’s efforts to coerce the international community into joining an economic blockade of Iran.

Transcript

[Host Adnan Nawaz] It’s good morning or maybe it’s good afternoon, James M. Dorsey, an adjunct senior fellow at the S. Rajaratnam School of International Studies in Singapore.

James, always a pleasure to have you on. You know that. Is this going to work? Trump’s idea to economically strangle Iran?

[James M. Dorsey] Adnan, it’s always great to be with you.

It’s not going to work, at least not in the short- or middle-term. Iran has long prepared for this kind of a situation.

Its perception of its own history is one of a struggle for survival for the last 47 years, being under threat, if not attacked, by the United States and Israel. In principle, however, what we’re seeing is a battle over timing. The United States and Donald Trump believe that timing for the first time, perhaps, is on their side.

The economic, the naval blockade of the Iranian ports is working. There is increasingly less available Iranian oil on the market, and there’s a lot of Iranian oil on ships stuck in the Persian Gulf that the Americans have prevented from transiting the Strait of Hormuz.

On the other hand, the Iranians see this also as a timing issue, because over time, the value and the leverage of the Strait of Hormuz, in terms of the Iranian strategy, is going to diminish.

And so, they want to capitalise on the moment in which they have leverage.

[Host Adnan Nawaz] China’s attitude when Donald Trump announced what was coming was extremely dismissive, effectively saying, we don’t care. But the Chinese attitude would be important, would it not, James, considering how much oil it buys from Iran?

[James M. Dorsey]

So, the problem here is, of course, the Chinese position is important. And the Chinese have already indicated, as have the Russians and presumably Turkey, that they are not going to sign on to this sanction regime by the United States. But on the other hand, China has already reduced its imports from oil and is diversifying its resources.

So, this is going to more affect Iran than it is going to affect China.

[Host Adnan Nawaz] Is this another way of Trump possibly trying to make an impact on everyday citizens who had come out in force, maybe one of the reasons that Trump went into this war, because he thought that that uprising would continue? We saw, James, as you were talking to us earlier, those shopkeepers in the Grand Bazaar in Tehran. It was the inflation that they were worried about that brought them onto the streets that then produced that kind of nationwide protest movement.

If inflation starts to bite hard, there will be more domestic resistance to the government, though. That would put a different kind of internal pressure on the country.

[James M. Dorsey] That is certainly Trump’s calculation. And what we’ve seen is, in the last several days, a reversion to the early war goal of regime change. The administration has been very clear about it.

And the hope on Trump’s part, of course, is that increased pain is going to persuade Iranians to take to the streets and topple the regime. The problem with that is that the way the Iranian social, economic, political structure is structured in preparation for a situation like this is that it actually shields the elite against the impact of these kind of sanctions and exposes the population. The problem with that is that Iranians are concerned at this point about everyday economics, about the inflation rate, about prices, about the availability of services.

They’re not—their primary concern at this point is not a change of regime. The question is whether in a situation like this, in which many Iranians have rallied around the flag, even if they don’t support the Islamic Republic, but have rallied around the flag because they don’t want to see a foreign power overthrow their government, whether that’s going to change as a result of the of the sanctions that Trump is now imposing.

[Host Adnan Nawaz] Yeah, it certainly hasn’t so far, has it? James M. Dorsey, enjoy the rest of your Sunday. Thank you so much for your analysis.

[James M. Dorsey] Adnan, it’s always a pleasure to be with you.