Trump Threatens Economic Warfare on Iran

September 2026
By Kelsey Davenport

The 60-day negotiating window that the United States and Iran set for reaching a nuclear deal ended in August without an agreement, prompting U.S. President Donald Trump to announce additional economic pressure on Iran.

The two states reached a memorandum of understanding in June that was intended to end the conflict that began Feb. 28 with illegal U.S. and Israeli strikes. The memorandum also reopened the Strait of Hormuz to maritime traffic and set a 60-day window for concluding a final deal, including on Iran’s nuclear program. (See ACT, July/August 2026.)

Both the United States and Iran violated the ceasefire commitment over the 60-day window and failed to sustain a negotiating process. Although they did engage through mediators Pakistan and Qatar during that period, there was little focus on nuclear issues, and the two sides did not agree to extend the 60-day negotiating period. As the deadline approached, both sides made military threats but neither side appears poised to return to war.

Before the Aug. 17 expiration, Iranian Foreign Minister Abbas Araghchi told the Iranian Students News Agency Aug. 14 that the June memorandum of understanding marked “the end of the war, not a ceasefire.” The same day, Araghchi said in a post on Telegram that Iran has “not yet made a decision to restart negotiations with the United States.”

After previously claiming in early August that Iran and the United States were talking and that a deal on the Strait of Hormuz was close, Trump said in an Aug. 18 post on Truth Social that there “are no talks or conversations going, or scheduled with” Iran. He said the U.S. naval blockade on Iran “remains in full force and effect” but that the Strait of Hormuz is “open and operating.”

Maritime traffic through the Strait, however, remains well below prewar levels and Iran has targeted ships that do not coordinate passage with Tehran. After closing the waterway during the war, Iran is now seeking to charge ships for services through the Strait and is working with Oman, which also borders the waterway, on a deal that includes new shipping routes. Araghchi said in the Aug. 16 Telegram post that the “routes that previously existed are no longer functional, and a new route must be defined.” He said the resumption of shipping “depends on the fulfilment of other conditions that the United States must adhere to.”

Trump, however, has suggested that the United States should administer the Strait of Hormuz and charge a toll for transiting ships, which would be illegal under international law. He said Aug. 14 on Truth Social that after “we finish defeating Iran” he will be “declaring the Hormuz Strait a territory of the United States” and posted a map labeling the area a U.S. territory.

In response, Iranian Deputy Foreign Minister Kazem Gharibabadi said in an Aug. 14 post on the social media site X that the “Strait of Hormuz cannot be seized by a tweet, nor by aircraft carrier.” He said that the “Strait of Hormuz has been Iranian, is Iranian, and will remain Iranian.”

Despite continued threats to attack Iran, Trump appears to have shifted U.S. strategy and announced that Washington will be ratcheting up economic pressure on the country, presumably to push Tehran to negotiate. In an Aug. 19 post on Truth Social, Trump said he offered Iran an opportunity to make a deal, but Tehran “failed to take it.” He announced that the United States would now pursue “Economic Warfare” and put in place “the MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY.” He also said any country doing business with Iran will face economic consequences.

It is unclear exactly what measures Trump is considering to increase pressure. U.S. Treasury Secretary Scott Bessett told Newsmax Aug. 13 that the United States is already taking steps to dismantle Iran’s shadow banking system, which Tehran relied upon to move money.

Araghchi responded to the announcement by saying in an Aug. 19 post on X that “doubling down on failed policies will only bring further defeat—and enmity of Iranians.”

Although Tehran is moving to solidify control over the Strait of Hormuz, it does not appear to be taking any concerted steps to rebuild its nuclear program or increase its nuclear leverage.

Trump threatened to attack a site under construction near Natanz tied to Iran’s nuclear program known as Pickaxe Mountain, telling reporters July 21 that the United States “would be hitting that area very soon.” The threat, however, appeared motivated by actions Iran took before the Feb. 28 war, not recent activity.

The United States would likely need to use the Massive Ordnance Penetrator, the largest conventional weapon in the U.S. arsenal, to damage the facility, given how deeply buried it is. The United States also could try to target the tunnel entrances into Pickaxe Mountain using smaller conventional weapons.

Iran declared the site to the International Atomic Energy Agency (IAEA) as a centrifuge assembly facility, but the IAEA has never inspected the site. Foreign ministry spokesman Esmail Baghaei said in a July 22 briefing that there is no nuclear activity taking place at Pickaxe.

Baghaei’s comments came after The Wall Street Journal reported July 21 that Iran may have moved thousands of centrifuges, the machines used to enrich uranium, into the site after the 12-day war in June 2025. Israel shared that intelligence with the United States, according to officials quoted by the newspaper.

It is unclear if the centrifuge machines came from one of Iran’s known enrichment facilities or if they are machines that were produced but never installed or operated. The IAEA has warned for years that it cannot account for all of Iran’s centrifuges.

Trump suggested July 21, however, that Iran did not move any nuclear materials to Pickaxe Mountain, which would be necessary if Iran intended to enrich uranium at the location.