SCOTT SIMON, HOST:
The Treasury secretary also faced questions about the war in Iran this week after President Trump threatened an economic D-Day. Secretary Bessent said this will collapse the Iranian regime.
(SOUNDBITE OF TV SHOW, "SQUAWK ON THE STREET")
SCOTT BESSENT: We are going to all of our allies, and this is going to be the greatest coordinated economic isolation in the history of the world. And we are going to them and saying, you are either with us or against us. Do you want this murderous regime to end?
SIMON: That's Secretary Bessent on CNBC, and he promised more details on Monday. Andy Gawthorpe joins us now. He's a professor at Leiden University in the Netherlands, where he focuses on U.S. foreign policy. Professor, thanks so much for being with us.
ANDY GAWTHORPE: Thanks for having me on the show.
SIMON: The Iranian government survived decades of U.S. sanctions, and now several months of naval blockades. Are there any options for economic pressure left?
GAWTHORPE: Well, as you say, Scott, the Iranian government is already one of the most heavily sanctioned in the world. And a lot of outside analysts are skeptical that there's really much more marginal or incremental steps the U.S. government can take that are going to have a big impact on Iran. When we do hear the announcement tomorrow, it's likely that what it will contain is a lot of details about how the U.S. intends to pressure Iran's trading partners and the countries it does business with and financial transactions with to try to get them to crack down on Iranian business activity. And that's because the U.S. exercises a great deal of control over the international financial system. But that control isn't complete. And, you know, Iran is still finding ways to trade with other countries who operate outside of the U.S. financial system.
Now, the problem that a lot of analysts see with this is that those countries, particularly China, are not likely to be too keen to go along with this U.S. pressure, to give in to this U.S. pressure. So what the U.S. has here is not so much an economic problem as a diplomatic problem. How does it persuade Iran's trading partners to act against what they see as their own interests by cracking down further on the Iranian economy? And there's a lot of skepticism that really there's much mileage in this approach.
SIMON: Well, I mean - let me put it this bluntly - what's in it for them?
GAWTHORPE: Well, exactly. That's right. And if - I mean, often when Washington is faced with a situation like this, where a country says, hey, what's in it for us if we go along with this, then the response can be, well, if you don't go along, then we will punish you in some way. We will use our economic or military or diplomatic might to force you to do what we want.
But we've got to remember that the main country we're talking about here is China, a very, very powerful country, one with which the U.S. has a very complex relationship. Trump is currently trying to de-escalate economic and diplomatic tensions with China. So it seems unlikely that he's going to be willing to blow up that relationship for what ultimately would be a relatively small, marginal benefit in terms of doing economic harm to Iran.
SIMON: But let's remind ourselves again, the Iranian economy we know has been struggling. They had to contend with soaring unemployment and inflation. Could any amount of new pressure push the government to the edge, get people out in the streets, cause some kind of change?
GAWTHORPE: Well, of course, we can never discount that. Because that happened earlier this year, as we all remember, in January when the Iranian government cracked down on protests. But look, I think that what outside analysts say about this is, is that if that is going to happen, it will be a result mostly of the measures that have already been imposed, particularly the U.S. naval blockade, which is really putting a big crimp on Iranian oil exports. So anything that's announced is likely to be just one more small piece of pressure. But in the scheme of things, I don't think it's going to make that much difference. And it's really that blockade that is pushing the Iranian economy in a dangerous direction.
But, you know, one thing about this that we should remember is that whereas sanctions can stay pretty much forever, that blockade has an expiration date. The U.S. military cannot impose that for five years, 10 years...
SIMON: Yeah.
GAWTHORPE: ...Fifteen years. So the question is, can Iran wait out that blockade? Can it impose enough economic harm on the U.S. to survive in the meantime?
SIMON: Do you think the United States signaling this move suggests the administration is moving away from military force or, for that matter, diplomacy?
GAWTHORPE: I think that's absolutely right. I think that over the last month or two months, there's been a recognition within the White House that there really are diminishing returns from further military action unless the president is willing to really escalate to a new level of brutality by targeting Iranian civilian targets, which he has threatened to do sometimes. But I think the problem is that there's also a recognition in the Pentagon and in the White House that if the U.S. escalates further militarily, Iran has a lot of military options to hurt the U.S. and its allies back. So there's a focus now on economic pressure, both sides thinking they can wait the other out but also the risk that, you know, if this economic pressure doesn't get a result quick enough, maybe one side will be incentivized to return to fighting.
SIMON: Professor Andy Gawthorpe, who teaches at Leiden University in the Netherlands. Thanks so much for being with us this morning.
GAWTHORPE: Thank you so much. Transcript provided by NPR, Copyright NPR.
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