Trump’s “maximum pressure” campaign on Iran effectively crippled its economy while avoiding military confrontation, demonstrating the power of economic sanctions as a diplomatic weapon.
At a Glance
- The Trump administration withdrew from the Iran nuclear deal (JCPOA) in 2018, reimposing harsh economic sanctions
- Iran’s currency has hit near-record lows due to Trump’s economic pressure strategy
- Despite escalating tensions, the Trump approach prioritized economic leverage over military intervention
- Iran has responded by increasing uranium enrichment and turning to Russia and China for support
- The April 2024 direct Iranian attack on Israel marked an unprecedented escalation in regional tensions
Economic Warfare: The Trump Strategy
For over 40 years, the United States and Iran have maintained a contentious relationship marked by periods of extreme tension. When President Trump took office in 2017, he inherited the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal, which had been implemented under the Obama administration. By May 2018, Trump made the consequential decision to withdraw from this agreement, arguing it was insufficient to contain Iran’s nuclear ambitions and regional aggression.
Instead of military action, Trump implemented what his administration termed a “maximum pressure” campaign. This strategy focused on leveraging America’s economic power through unprecedented sanctions designed to force Iran back to the negotiating table on terms more favorable to the United States. These sanctions targeted Iran’s oil exports, banking sector, and other critical industries, effectively isolating the country from the global financial system.
The impact on Iran’s economy has been severe and measurable. The Iranian rial plummeted to near-record lows, inflation soared, and oil exports—the lifeblood of Iran’s economy—dropped dramatically. According to reports, the economic pressure has hit ordinary Iranians particularly hard, while the ruling elite have largely been able to insulate themselves from the worst effects. This economic stranglehold presented Iran’s leadership with difficult choices: return to negotiations, continue defiance at great cost, or escalate through proxy conflicts.
— The Long View (@HayekAndKeynes) March 21, 2025
The Nuclear Response
Rather than capitulating to U.S. demands, Iran responded to the “maximum pressure” campaign by accelerating its nuclear program. After observing the JCPOA’s limitations for a year following the U.S. withdrawal, Iran began exceeding uranium enrichment limits in mid-2019. By January 2020, following the U.S. killing of General Qasem Soleimani, Iran announced it would no longer adhere to the deal’s restrictions while maintaining that its nuclear program remained peaceful.
By 2023, international monitors reported that Iran had enriched uranium to 84% purity—perilously close to weapons-grade material of 90%. This nuclear advancement occurred despite, or perhaps because of, the economic pressure Iran faced. The Islamic Republic also continued developing ballistic missile technology, which the United States maintained violated UN Security Council Resolution 2231. These developments demonstrated Iran’s determination to build leverage of its own in the face of American economic warfare.
Proxy Conflicts and Regional Tensions
Throughout the Trump era, Iran maintained and expanded its support for proxy forces across the Middle East, including Hezbollah in Lebanon, Houthi rebels in Yemen, and various militia groups in Iraq and Syria. These proxies allowed Iran to project power regionally while maintaining plausible deniability and avoiding direct military confrontation with the United States. The strategy reached a dangerous inflection point in January 2020 when the U.S. killed General Qasem Soleimani, commander of Iran’s elite Quds Force.
“I think they’re concerned; I think they feel vulnerable, and I don’t want them to feel that way”, says President Trump.
The situation escalated dramatically following the Israel-Hamas war that began in October 2023. Iran-backed militias increased attacks on U.S. forces in the region, and in April 2024, Iran launched its first-ever direct attack on Israeli territory, firing approximately 300 drones and missiles. While Israel intercepted the majority of these projectiles with help from the United States and regional partners, this unprecedented direct action by Iran signaled a new phase in regional tensions and demonstrated the limits of economic pressure as a containment strategy.
— The Geopol Journal (@geopoljournal) November 5, 2024
Economic Sanctions vs. Military Action
The Trump administration’s approach to Iran illustrates the potential and limitations of economic sanctions as an alternative to military intervention. While sanctions severely damaged Iran’s economy and limited its financial capacity, they did not achieve their stated goal of bringing Iran back to negotiate a more comprehensive agreement. Instead, Iran accelerated its nuclear program and deepened ties with Russia and China, creating alternative economic partnerships that partially mitigated Western sanctions.
Yet advocates of the maximum pressure strategy point to significant achievements: Iran’s financial resources for supporting terrorism were constrained, regional allies were reassured of American commitment, and direct military conflict was avoided. The approach also demonstrated that economic power can be wielded with precision against adversaries, potentially sparing the human and financial costs of military engagement. As tensions continue to simmer between the United States and Iran, the Trump-era policies offer important lessons about the strengths and limitations of economic warfare in modern international relations.
