Why Washington’s ‘Economic D-Day’ Against Iran Faces Steep Odds
Russia, North Korea, Cuba and Venezuela have all deployed repression and myriad sanctions-busting tools to resist even heavy Western pressure.
In a recent move, the Trump administration announced what it dubbed an "Economic D-Day" in an attempt to compel Iran to reopen the Strait of Hormuz and resume negotiations. However, history has shown that such economic pressures against autocracies like Cuba, North Korea, Venezuela, and Syria have proven challenging for Washington. These regimes have often utilized a mix of violence, economic adaptation, and political suppression to withstand pressure for extended periods.
When sanctions are imposed, they typically drive activity underground, fostering black markets for goods, services, and even people. Dictators leverage external pressure to rally their populations, particularly among the elite. Cuba, for instance, has relied on its diaspora to supply food and medicine despite heightened U.S. pressure.
North Korea has bolstered its finances by engaging in illicit cryptocurrency dealings and tricking Americans into working for them in American companies. Russia has redirected its trade towards China and other non-Western powers.
Iran, which has labeled the U.S. campaign as "economic terrorism," has long experience adapting to economic sanctions. Its trade has expanded with neighboring countries, and it has established a parallel financial system with China, circumventing the U.S.-led banking system and diminishing Washington's ability to enforce sanctions. According to Djavad Salehi-Isfahani, an economist at Virginia Tech, the impact of these pressures on the Iranian government's willingness to compromise remains to be seen.
While some successes have been achieved through economic pressure on autocracies, direct military action may be necessary in certain instances, as seen with the capture of Venezuela's former leader Nicolás Maduro and the ousting of former Syrian President Bashar al-Assad. Nonetheless, the success of economic pressure often hinges on its combination with diplomatic campaigns to weaken the regime, according to Aaron Arnold, a former expert on the United Nations panel monitoring sanctions enforcement against North Korea.
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