Top Iran official says US focus on economic warfare shows it has failed militarily

The Iranian regime has dismissed President Trump’s threats to crush the country economically, saying that years of U.S. sanctions have failed.

On Friday, Iran’s parliamentary speaker Mohammad Baqer Qalibaf, the country’s main ⁠negotiator with the U.S., said Trump’s threat of an “economic D-Day” showed Washington was unable to prevail militarily.

“The Americans and the Israelis have realised that they cannot handle Iran…in the field of a hard military war, so they have entered into a cognitive war and an economic war,” he said during a visit to neighboring Iraq.

Iran’s Foreign Minister Abbas Araghchi had also condemned Trump’s announced pivot to economic warfare, calling it ‘economic terrorism’ meant to divert attention from U.S.’s economic problems. He said in a social media post that doubling down on failed U.S. policies would further increase anti-American sentiment.

Earlier this week, Trump wrote on Truth Social promising “the most crushing economic operation ever taken against any country” and calling on allies to stand with the U.S.

His remarks come with diplomatic efforts to revive peace talks completely stalled, days after a 60-day memorandum of understanding to negotiate an end to the war expired.

A U.S. blockade is still in place and Iran is still heavily restricting traffic through the Strait of Hormuz, a crucial oil waterway.

The U.S. already has extensive sanctions on Iran that make a lot of international trade with Western countries impossible, and in June, the U.S. also cracked down on refineries and businesses which buy Iranian oil. Now Treasury Secretary Scott Bessent is threatening even more secondary sanctions on nations – not just business entities – that do business with Iran.

On Wednesday, Trump wrote “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.” 

Treasury Secretary Scott Bessent added in an interview on Thursday with CNBC that Iran will face the “greatest coordinated economic isolation in the history of the world.”

“It is going to work in Iran and we are going to collapse this regime. It is time for our allies and the rest of the world to make a decision,” he said.

The threat of secondary sanctions has raised questions about how that will affect China, which buys Iranian oil and which was the only country Bessent mentioned by name.

“Unfortunately, they’ve been buying, they were the largest consumer of Iranian oil, they were buying about 90 percent of it,” he said. But when asked if China might be targeted, Bessent declined to answer.

On Friday a Chinese foreign ministry spokesman called for negotiations rather than sanctions, saying “sanctions and pressure tactics are not the solution.

Bessent is expected to hold a press conference on Monday to give the details on how Trump’s “economic D-Day” will be achieved.

Sina Toossi, a senior fellow at the think tank Center for International Policy in Washington told NPR ideological hardliners now have control of parts of Iran’s government and the economy is not their priority.

“There’s this existential threat that the Iranians have been faced with. So they’re willing to bear much greater economic costs to kind of secure their survival,” she said.

Emily Feng in Washington DC and Kate Bartlett in Johannesburg contributed to reporting.