The Journal. - Can an ‘Economic D-Day' End the Iran War?

Episode Date: August 25, 2026

Yesterday, the Trump administration announced a new strategy in the war against Iran that targets the regime’s remaining economic lifelines. Treasury Secretary Scott Bessent called it an “economic D-Day.” WSJ’s Brian Schwartz explains the U.S.’s new sanctions approach and analyzes what impact it could have on the Iranian economy. Jessica Mendoza hosts. Further Listening: - Do Sanctions Still Work? - Inside Trump and Netanyahu’s Complicated Relationship Sign up for WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

This week marks six months since the war with Iran started, a war that the U.S. launched along with Israel and that President Trump initially said would last only weeks. Right from the beginning, we projected four to five weeks, but we have capability to go far along. Now, as the war carries on with no end in sight, the U.S. announced the beginning of a new phase, one led by Treasury Secretary Scott Bessent. In the Second World War, D-Day marked the historic beginning of a campaign with our allies to target and drive the enemy from its positions. Yesterday, Bessentheld a highly anticipated press conference to announce what he called an economic D-Day on Iran. In that same spirit, we are launching an economic onslaught against Iran's financial connections around the globe.

It was billed as a key moment in the larger war against Iran. There were dozens of reporters there. That's our colleague Ryan Schwartz, who reports on economic policy. It was supposed to be this moment for Secretary of Pesent to kind of take a leading role in shaping how the U.S. was going to respond against Iran's economy. And I mean, what do you make of the comparison with D-Day? Well, I mean, D-Day, you think of, you know, I'm a, I'm a, I'm a, I'm a, you know, I'm a, Americans running on the beaches of Normandy, fighting the Nazis. This is a momentous hour in world history.

This is the invasion of Hitler's Europe. I don't think it says an apt comparison, but if you're the Trump administration, you need to show the world that you're willing to go pretty far in taking on Iran. And this is the latest piece of that. Our objective is to sever every economic lifeline that sustains this tyrannical regime. until Tehran stands alone. Besson threatened the countries and entities still doing business with Iran with a new set of sanctions. We know who they are. They know who they are. So when the hammer of U.S. Treasury actions falls upon them, they will have no one to blame but themselves.

I think there's this sense that the military campaign is only doing so much to bring Iran to the table. The Treasury and the president are moving to do this. which has kind of put an economic stranglehold on Iran in the hopes that they'll cry uncle and give in to the U.S. demands. Welcome to The Journal, our show about money, business, and power. I'm Jessica Mendoza. It's Tuesday, August 25th. Coming up on the show,

can this economic D-Day end the war with Iran? Brian, as we've said, the war on Iran's been going on for months. Why make this announcement now? I think the administration's on a little bit of political pressure. You know, we're heading into the midterms at a few months. This war is not really popular. Gas prices are still up. In most cases, I filled my tank to the day.

Regular gas was like somewhere around $4.45. That's right. You know, so that's why I think they pushed out this idea of this being the next phase and trying to take on that country. So far, the U.S. has struggled to bring the war to an end. A ceasefire that had been set up in June expired last week without the country's reaching a peace agreement.

The Strait of Hormuz is operating at a fraction of what it was before the war began. In the meantime, according to Wall Street Journal reporting, the U.S.'s munition stockpile is running low. A spokesperson for the White House disputed that there was a shortage. Still, Brian says the administration is moving in a different direction.

I think it comes down to questioning how much of an impact the military strategy has had, right? There's a big difference between using strikes and negotiations ongoing versus using strikes and negotiations ongoing, and there's a result at the end of that, where there's a substantive deal, the actual deal, that the two countries can be satisfied with. So since that seemingly isn't entirely working,

income secretary Besson's concepts of let's try to put an economic strangle hold on a run. Okay, let's return to this economic, McDadee announcement. What details did Bessent lay out in terms of these new sanctions? What were we able to take away from that press conference? So there's a few things. He announced that there was over 60 entities, individuals and the like who are under these newer sanctions. Even though Iran has already been heavily sanctioned, the regime still has various trading partners around the world, helping to keep its economy afloat. They enable Iran to access nuclear and missile technology, carry.

out cyber operations and earn revenue from oil. The administration is now sanctioning over 60 of those partners and threatening more on anyone still doing business with Iran, all with the goal of cutting off Iran's remaining economic lifelines. Treasury has mapped every node, every facilitator, and every network that Iran has used to smuggle oil and evade sanctions. The Treasury has a lot of tools in the tool chest to investigate the, you know, the these companies, these people, and the countries at large.

It's only just a question of whether these kind of scare tactics by the Treasury Department is going to work to push back on some of these people or countries themselves. It didn't sound like the Treasury Secretary named any names. No, he did not. Is there a sense of why? No, he didn't name anyone. And that was a little surprising to me to tell you the truth. The fact that Besant didn't name China in particular stood out.

China is Iran's biggest. trading partner, and usually its number one buyer of oil exports. But Washington so far has been reluctant to seriously confront Beijing over its support for Iran. If he tried to levy sanctions on China or China-related entities that do business with Iran, that's a big deal. But that is a little bit complicated right now because the president is trying to have a stronger relationship with China. I mean, despite all the back and forth with China and threatening trade wars and all that, the president really does from everything he has said publicly wants to have a better relationship with China than previously.

Bessent was asked about China during yesterday's press conference. Is the very delicate trade truce with China something that could prohibit you from, you know, going that far and taking that very big step? We want to make clear to hear today that no one is above the reach of U.S. sanctions, that if they facilitate transactions, and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted. A Chinese foreign ministry spokesman said that economic warfare will only heighten tensions and could disrupt the global economy. Another thing Besson said was that President Trump is going to be making phone calls to world leaders to kind of request or ask that they stop doing business with Iran.

Do you see that moving the needle? I did find a notable that he disclosed that. That was interesting. I don't think I've ever seen that report it elsewhere. The president was making direct phone clause, so world leaders say, please don't do business with Iran. You know, the president has, to be fair to him,

a really unique relationship, especially with NATO and various European allies, that at least they're going to take his call and hear him out. Now, are they going to necessarily go about and do exactly what he wants? I don't think so. I think there's still going to be pressure on him from various people around the world

to get this sorted out quickly because so many countries need this straighter from moves to be operating at full speed for their countries to thrive. Another demand that peasant made of countries around the world was to stop working with Bank Mali, the state-owned Iranian Bank. It has branches in several European countries and across the Middle East. Every branch of Bank Mali must be shuttered and dark. He made that extremely clear that the financial institutions that are based in Iran, at least one of them, that have branches all around the world in various parts.

All of those branches have to close. And that really stood out to me because it suggests that aspect of Iran's economy might be a big target by the United States. How big an ask is that of other governments? Yeah, I think it's a big deal. Now, I guess the follow-up would be, well, if a country doesn't force these branches to shut down, what exactly is the Treasury Department going to do? And how are they going to handle that? I'm not so sure about what they could do.

But it's a toll order. Even some of those branches get shut down because of the Treasury Secretary's demands. Even before Besson's press conference, Iran's top security official had said that Iran will regard any country's support for Washington's economic campaign as an act of war. So Iran's leadership are making it clear

that effectively everything that the Treasury Secretary said was bluster in their opinion, and it's not going to hurt their economy. What is going on inside Iran's economy? That's next. U.S. sanctions have been hurting Iran's economy for decades. And since the war began, conditions have only gotten worse. In that situation, it's really kind of desperate times. They have the equivalence of a survival economy, right?

They have an economy that is rationing scarce goods and limiting access to foreign currency, slashing investment, and that's according to analysts that the Wall Street Journal has spoken with. Can you break that down a little bit more? Well, it feels like politically, I mean, that they, from everything I've seen, that they, every time one of these sanction packages comes down, they kind of publicly just kind of brush it off. I mean, I don't know how else to put it like this.

I feel like they show the world in their opinion that they can survive these things. and to be fair to that, they have been able to survive. For the Iranian people who have to live with this situation, it's become increasingly difficult to make ends meet. Poverty is rising. Inflation has skyrocketed. The price of milk has more than doubled, and chicken prices have nearly tripled.

But when you also look at how the Iranian people are responding, there's no real significant uprising here. I mean, what are the leaders of that country going to do? Well, they're going to double and triple down their issues with the United States. That's just politics. Right. It doesn't seem like the economic pressure

thus far has pushed Iranian leadership closer to wanting to end the war on the U.S.'s terms, at least. That's right. Earlier this month, Iran reshuffled its leadership and elevated some veteran hardliners. According to Wall Street Journal reporting, these new leaders are less likely

to support negotiations with the U.S. So in terms of these sanctions, at least these new ones, how likely does it seem that they will ultimately lead to Iran capitulating? If they go through with the threats they made at the press conference, then Iran could be in a little bit of trouble here. Because when you're being isolated in a war, or if there's an attempt to isolate you as a country in a war, but again, you're still negotiating with other countries for various goods and deals and you're surviving through that. that still puts you in a good position. But if these sanctions that the Treasury Secretary teased out in this press coverage come to fruition, that would be a significant blow to their economy.

What options would Iran have for retaliation? Well, it would be maybe trying to pressure the United States again through the straight of from moods. You could see Iran trying to strike more at Israel than they already have. You could see Iran trying to strike various military bases more than they already have because that is something that they have somewhat of an advantage of. they were in proximity to various military bases and battleships that they could strike at any time. And the U.S. could counter and we could go back and forth in this again.

Right. Wouldn't that just sort of then send the U.S. back into a military fight? It could. We could be right back to where we started again if Iran does that. This week, two more oil tankers in the region were struck. The first was claimed by the Iran-backed Houthi militia in Yemen. No one immediately claimed responsibility for the second attack. You said earlier that the administration

announced this new phase of the war, in part because of pressure from the upcoming midterm elections. Do you get the sense that the Trump administration is trying to delay more military action until then? Well, I think that they're trying to find better solutions to a problem that was their own creation. I mean, they are in a political logjam right now. They have to find a way to get Iran to come to the table and get to some conclusion at the very least around. the oil prices. And that goes back to straight different months. So they have to figure that out in their view quickly because of the midterms coming up. So six months in, you know, how far is all of this from what the president seemed to think would happen when the U.S. and Israel first started doing

military strikes against Iran? You know, the president put out a lot of true social posts, said a lot of things that he seemed to believe that the conflict of the Wren was going to mirror what happen with Venezuela as an example, right? You just go in there, hit the country, take up their leadership, and unfortunately for the president, that has not happened here. So now he's kind of in this difficult position, right? What do you do? Do you keep on with a military conflict and try to hope their economy depletes by hitting their buildings and wherever else? Or do you try to go and do this differently through the Treasury Department? And that's why I think he's going with Scott Besson's ideas at this point. What has been most interesting to you about this development in the story, Brian?

Well, I think what's interesting is that he's turning to the Treasury Secretary for this. It speaks to how much the president trusts Scott Bessett. Now, the problem is that if this doesn't pan out, the president is going to have to hold somebody accountable. And that may end up being the Treasury Secretary. So he's going to be in a little bit of a box here. to decide and decipher how this is going to go and be as effective as it could be. That's all for today, Tuesday, August 25th. The Journal is a co-production of Spotify

and The Wall Street Journal. Additional reporting in this episode by John Eamont, Rory Jones, Georgi Kanchev, Hennamousavi, Lawrence Norman, Summer Saeed, and Alexander Ward. Thanks for listening. See you tomorrow.