Trump Won't Like This: Iran's Clever Strategy of Pushback Is Working

Stratfor Worldview

Key point: Iran is no match for America, but it is working hard to resist Washington’s pressure campaign.

Over the past three months, the U.S.-Iran conflict has gone from Washington's campaign of "maximum pressure" against Tehran to Iranian provocations that called the White House's bluff (and brought the region to the brink of war in the process) to a French-tailored diplomatic opening. Bloodied but unbowed, Tehran has endured Washington's sanctions, demonstrating to U.S. President Donald Trump that it has no intention of entertaining any of the United States' demands until it receives sanctions relief. The question now is whether, amid the glimmer of possible negotiations, the White House actually relents on sanctions or chooses to double down on its maximum pressure campaign to force through what it wants. That, however, is only likely to return the two foes to a stalemate — and lead the Islamic republic to kick off a new cycle of tensions in the hopes of finding succor for its ailing economy.

A Summer Spent Raising Stakes

The White House wrongly assumed that hammering Iran in a campaign of maximum pressure would force Tehran to capitulate to U.S. demands for a far more stringent and comprehensive deal to curb Iran's nuclear and regional ambitions. To be sure, Iran is in deep economic pain: Inflation is hovering near 50 percent, foreign investment is largely frozen and the country's oil exports have dropped (estimates vary) to below 200,000 barrels per day — a far cry from the roughly 2.5 million bpd that the country was exporting before the White House pulled out of the Iranian nuclear deal last May. Nevertheless, the Iranian government is not flailing under heavy economic duress. Iran's central bank has managed to stabilize the currency in recent months, smugglers have resurrected illicit networks to sell oil and the government has imposed severe penalties on currency traders and businesses to restrict price gouging and prevent widespread unrest.

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