# Operation Economic Outcast: Can Trump really isolate Iran?

An episode of [7am](https://invisiblenetwork.ai/podcast/1461999702), 26 Aug 2026, 16 min.

Audio: https://p.podderapp.com/2544644999/traffic.omny.fm/d/clips/2fb3740d-3436-44af-8cc0-a91900716aa5/62723a1f-3e96-4fc4-882c-b25e0181da4d/5814d02f-0d7d-4ff9-9987-b4b2005c1413/audio.mp3?utm_source=Podcast&in_playlist=70f29d90-2a63-48aa-bf8f-b25e0181da70

As Trump’s war with Iran reaches the six-month mark, the US is increasing its economic pressure – threatening harsher sanctions not just against Iran, but against anyone else who does business with it. That puts China, the country’s most important trading partner, directly in Washington’s sights. But how much of this is just bluster? And has Trump lost the ability to turn this conflict in his favour? Today, The National Interest’s editor-at-large, Steve Clemons, on the dwindling options available to the US – and what that means for its increasingly unpopular president. If you enjoy 7am, the best way you can support us is by making a contribution at 7ampodcast.com.au/support. Socials: Stay in touch with us on Instagram Guest: Editor-at-large of The National Interest, Steve Clemons Photo: AP Photo/Jacquelyn Martin See omnystudio.com/listener for privacy information.

## Transcript

[0:01] Speaker 1: I'm Ruby Jones, and you're listening to 7am. As Trump's
[0:09] Speaker 1: war with Iran reaches the six-month mark, the US is
[0:12] Speaker 1: increasing its economic pressure, threatening harsher sanctions against not just Iran,
[0:18] Speaker 1: but anyone else who does business with it. That puts China,
[0:21] Speaker 1: the country's most important trading partner, directly in Washington's sights.
[0:26] Speaker 1: But how much of this is just bluster? And has
[0:28] Speaker 1: Trump lost the ability to turn this conflict in his favour? Today,
[0:33] Speaker 1: editor-at-large of The National Interest, Steve Clemens, on the dwindling
[0:37] Speaker 1: options in front of the US and what it all
[0:39] Speaker 1: means for its increasingly unpopular president. It's Thursday, August 27.
[0:54] Speaker 2: Today, at President Trump's direction, the United States Treasury... has
[0:58] Speaker 2: begun Operation Economic Outcast.
[1:02] Speaker 1: Steve, we heard this week about Operation Economic Outcast, which
[1:07] Speaker 1: is this very dramatic-sounding name, and it was announced at
[1:11] Speaker 1: this pretty dramatic press conference.
[1:13] Speaker 2: We are launching an economic onslaught against Iran's financial connections
[1:19] Speaker 2: around the globe. Around the globe.
[1:22] Speaker 3: Our objective is to sever.
[1:24] Speaker 2: Every economic lifeline This sustains this tyrannical regime until Tehran
[1:31] Speaker 2: stands alone.
[1:32] Speaker 1: To begin with, tell me what it actually is.
[1:35] Speaker 3: America is really good at Hollywood-sounding punctuation points, but the
[1:41] Speaker 3: real world is not as organized about it. This is
[1:43] Speaker 3: about the president trying to use the tools that he
[1:48] Speaker 3: has right now, which may be economic, because we've actually
[1:52] Speaker 3: spent a lot of our missiles and our firearms in
[1:55] Speaker 3: which he said he was going to bomb Iran into oblivion.
[1:59] Speaker 3: And Iran is not cooperating with the Donald Trump plan.
[2:02] Speaker 3: So right now they're trying to say, OK, we're going
[2:04] Speaker 3: to create an economic D-Day. And anyone that trades with Iran,
[2:08] Speaker 3: that does business with Iran, is going to be excommunicated
[2:12] Speaker 3: from the American church. That's what this is about.
[2:15] Speaker 2: Every country has a defined timeline to shut down activities
[2:19] Speaker 2: we have identified. And let me be clear, any entity
[2:23] Speaker 2: that facilitates money laundering on behalf of Iran will be
[2:28] Speaker 2: removed from the U.S.
[2:30] Speaker 3: Dollar system. The clock just started ticking.
[2:34] Speaker 4: Okay.
[2:35] Speaker 1: And so how exactly would the U.S. go about getting
[2:39] Speaker 1: the rest of the world to sever its economic ties
[2:41] Speaker 1: with Iran?
[2:42] Speaker 3: Well, the truth is the United States, number one, has
[2:46] Speaker 3: enormous leverage in the global economic system because it basically,
[2:51] Speaker 3: because of the reserve currency status of the dollar and
[2:54] Speaker 3: what's called the SWIFT system, and the transactions that really
[2:58] Speaker 3: dominate global commerce are done through dollars. It has the
[3:02] Speaker 3: ability to exile parties, to sanction parties, to keep them
[3:07] Speaker 3: from operating with the system that the United States dominates.
[3:11] Speaker 3: Here's the downside of that story. We've already basically done
[3:15] Speaker 3: this with Iran. There are nations like Japan, Korea, and
[3:18] Speaker 3: others that have been dependent upon Iranian oil, but that's
[3:22] Speaker 3: been cut off. So You have to ask yourself, OK,
[3:25] Speaker 3: who's still out there? And the big answer is one
[3:28] Speaker 3: big country. There may be some small countries like North Korea,
[3:31] Speaker 3: Russia and others. Russia economically is a small country, not
[3:35] Speaker 3: a big country. It's China. China is the 900 pound
[3:38] Speaker 3: gorilla in this equation.
[3:40] Speaker 1: And China is already saying that any measures like this,
[3:43] Speaker 1: any secondary sanctions, they're saying it would be illegal.
[3:47] Speaker 4: China-Iran cooperation has always been conducted within the framework of
[3:51] Speaker 4: international law and should not be disrupted or undermined. China
[3:56] Speaker 4: is closely monitoring relevant developments and will take all necessary
[3:59] Speaker 4: measures to resolutely safeguard its own rights and interests.
[4:03] Speaker 1: So picking a fight with a country like China is
[4:05] Speaker 1: obviously very different to Iran.
[4:07] Speaker 3: How hard do you think the U.S.
[4:10] Speaker 1: Would go to enforce anything like this when it comes
[4:14] Speaker 1: to China?
[4:15] Speaker 3: I don't think they would at all with China. I mean,
[4:18] Speaker 3: the United States and China do $ 750 billion of bilateral
[4:23] Speaker 3: trade each year. We're joined at the hip. China owns
[4:27] Speaker 3: an enormous amount of American treasuries they could dump on
[4:31] Speaker 3: the markets. They could also stop buying American treasuries entirely,
[4:35] Speaker 3: which we're already beginning to see happen, which is why
[4:38] Speaker 3: long-term interest rates in the United States are going up
[4:42] Speaker 3: because other nations are not buying RT bills as China
[4:47] Speaker 3: and Japan have been doing in the past. So China
[4:50] Speaker 3: has a lot of economic leverage in this moment. They're
[4:52] Speaker 3: in a very strong position. And The truth is we
[4:56] Speaker 3: need China as much as China needs us. And so
[4:59] Speaker 3: the idea that Donald Trump is going to follow the
[5:04] Speaker 3: trade war he's launched with Canada and create a trade
[5:07] Speaker 3: war with China is not serious.
[5:10] Speaker 1: But China buys up to kind of 90% of Iran's oil.
[5:15] Speaker 1: So it's a big source of, that is a big
[5:17] Speaker 1: source of revenue to the Iranian regime.
[5:19] Speaker 3: We can say it is the source. Yeah.
[5:22] Speaker 1: So does this kind of economic outcast plan, does it
[5:25] Speaker 1: even work without severing that tie?
[5:27] Speaker 3: No, it absolutely does not. The bottom line here is
[5:33] Speaker 3: that with what Treasury Secretary Scott Besson was trying to
[5:36] Speaker 3: put forward is that There are a lot of small
[5:40] Speaker 3: nations that are not significant on the radar screen that
[5:44] Speaker 3: may do modest commerce with Iran's oil sector. They are trivial.
[5:51] Speaker 3: The 900-pound gorilla is China. We do not have the
[5:54] Speaker 3: latitude to sanction China, to cut off China, to say
[5:58] Speaker 3: you're now exiled and excommunicated from the global economic system.
[6:02] Speaker 3: That would spell the end. of America's dominance of the
[6:07] Speaker 3: economic system, because China would rebel, put a league of
[6:10] Speaker 3: nations together and saying, see you later, U.S. dollar, and
[6:15] Speaker 3: we would no longer have the power and leverage that
[6:18] Speaker 3: we do now. Power and leverage and mystique as a
[6:21] Speaker 3: superpower comes from carefully applying tools when you need, not
[6:26] Speaker 3: from a might makes right world. And that is what
[6:28] Speaker 3: Donald Trump is deploying. So in this case, China would
[6:32] Speaker 3: come out the winner, Iran would escape any serious sanctions
[6:36] Speaker 3: and the United States would be trivialized after this action,
[6:42] Speaker 3: which Donald Trump and Treasury Secretary Scott Besson took.
[6:45] Speaker 2: Right.
[6:45] Speaker 1: And it's been almost six months now since the U.S.
[6:48] Speaker 1: began this war with Iran. And in that time, its
[6:51] Speaker 1: military operations have failed to force Iran into any deal.
[6:55] Speaker 1: So how desperate do you think Trump and his administration
[6:59] Speaker 1: are right now?
[7:01] Speaker 3: I wouldn't. I mean, desperation is a word I wouldn't use.
[7:04] Speaker 3: I would use the word frustration because desperation implies you
[7:07] Speaker 3: don't have other options. The other options are to walk away.
[7:10] Speaker 3: The other options are just basically dial it down. Donald
[7:13] Speaker 3: Trump is driven right now by wanting the Strait of
[7:17] Speaker 3: Hormuz open, wanting Iran to be off of his radar
[7:20] Speaker 3: screen of concerns, wanting to get back to elections. He
[7:23] Speaker 3: wants to be seen as a winner. He wants Iran
[7:26] Speaker 3: to be seen as a loser. And in that He
[7:29] Speaker 3: is deeply, deeply frustrated. Is he desperate? I don't know
[7:33] Speaker 3: if he's desperate by anything other than his own calendar
[7:37] Speaker 3: and need to achieve victory. There are ways in which
[7:39] Speaker 3: the United States could have what Iran is doing, which
[7:42] Speaker 3: is take the law game. You know, how solid and
[7:46] Speaker 3: secure is Iran's leadership? We don't know. But trying to
[7:49] Speaker 3: do these things that seem to be, you would say desperate,
[7:53] Speaker 3: I would say frustrated, trying to drive this towards a
[7:56] Speaker 3: near-term conclusion, All Iran has to do is wait it out.
[8:01] Speaker 3: Iran wins by waiting it out.
[8:07] Speaker 1: Coming up, Trump's diving popularity. Steve, you said that Trump
[8:24] Speaker 1: still has the option of just walking away from this
[8:27] Speaker 1: war with Iran. So why doesn't he do that?
[8:31] Speaker 3: His ego won't allow it. I think right now he
[8:34] Speaker 3: was seduced into this action by a key security partner
[8:38] Speaker 3: of the United States, the Prime Minister of Israel, Benjamin Netanyahu.
[8:41] Speaker 3: A lot of his advisers cautioned him that there would
[8:44] Speaker 3: be real costs and risks, including the CIA director, including
[8:47] Speaker 3: the Secretary of State. There were other people there that said,
[8:50] Speaker 3: this is not a cakewalk like Venezuela. And you've got
[8:53] Speaker 3: to be cautious and careful. And he went with Prime
[8:57] Speaker 3: Minister Netanyahu, thought it would be easy to spark a
[9:01] Speaker 3: revolution and a regime change momentum inside Iran, that this
[9:05] Speaker 3: would be easy and over. When nearly every analyst who
[9:09] Speaker 3: has looked at this for years and decades realized that
[9:12] Speaker 3: Iran's real nuclear bomb was not a nuclear bomb. Iran's
[9:16] Speaker 3: real nuclear bomb was controlling and taking over effective control
[9:21] Speaker 3: of the Strait of Hormuz and preempting the world's vital
[9:25] Speaker 3: energy traffic and fertilizer traffic through that strait. So Donald
[9:30] Speaker 3: Trump miscalculated on this. And I think he's frustrated because
[9:33] Speaker 3: he wants out of this quagmire, which he's in. He's
[9:36] Speaker 3: in a quagmire. It's very hard for his ego and
[9:39] Speaker 3: for the United States to leave because it would leave
[9:42] Speaker 3: Iran with more than it had before this conflict began,
[9:46] Speaker 3: which is control over one of the most important straits
[9:49] Speaker 3: in the essentially was a public commons, a global commons
[9:53] Speaker 3: before this conflict started. But now Iran will not allow
[9:56] Speaker 3: that to happen. So we're at a point where I
[9:58] Speaker 3: don't know what's going to happen in the future. But
[10:00] Speaker 3: I can tell you that America's quick fix solutions are
[10:06] Speaker 3: doomed to fail in this situation. But Donald Trump is
[10:09] Speaker 3: very frustrated with the options that he has to try
[10:13] Speaker 3: to coerce Iran in the direction it wants to. And
[10:16] Speaker 3: Iran has options. It has allies. It has China. It
[10:19] Speaker 3: has Korea. It has Russia. There's a whole league of
[10:22] Speaker 3: nations that have said, you know, we're not going to
[10:24] Speaker 3: live the way the United States wants. And I think
[10:27] Speaker 3: that's something Donald Trump is just experiencing for the first
[10:30] Speaker 3: time in his presidency. Yeah.
[10:33] Speaker 1: So if Tehran thinks that it can simply endure this,
[10:37] Speaker 1: wait it out, what leverage does Trump actually have left
[10:40] Speaker 1: at this point?
[10:42] Speaker 3: Look, I think President Trump is a very unusual candidate.
[10:46] Speaker 3: president who does not see national security in traditional ways.
[10:50] Speaker 3: His strength is that. His strength is that he was
[10:55] Speaker 3: not going to get drawn into wars and conflicts that
[10:59] Speaker 3: were going to bleed the bank and not achieve results.
[11:02] Speaker 3: And there were a lot of Americans and actually a
[11:04] Speaker 3: lot of allies who were exhausted from the Iraq War,
[11:07] Speaker 3: the Afghanistan War, the various conflicts that came after 9-11,
[11:12] Speaker 3: the reshuffling of the global debt. And Donald Trump said,
[11:15] Speaker 3: we're not going to have any of that. Then he
[11:16] Speaker 3: got seduced into one of those things. And now he's stuck.
[11:19] Speaker 3: He's actually stuck. And, you know, there are many people,
[11:22] Speaker 3: many in his base, many in the nation, many independents
[11:25] Speaker 3: right before a midterm election in the United States who
[11:28] Speaker 3: think he's lost sight of what core national interests are.
[11:32] Speaker 3: Right now, Donald Trump is stuck. The American public doesn't
[11:35] Speaker 3: like it. And he's got the lowest popularity ratings of
[11:39] Speaker 3: his administration, both of his administrations. because of this Iran conflict.
[11:44] Speaker 1: I wanted to ask about that because the war has
[11:47] Speaker 1: very little public support at the moment, right?
[11:50] Speaker 3: Right now, I think his popularity is at 32 or
[11:53] Speaker 3: his approval is at 32 or 33%, which is the
[11:56] Speaker 3: lowest of his administration, of both administrations.
[12:00] Speaker 1: It seems like the only way that Trump will be
[12:02] Speaker 1: able to get out of this is by exiting with
[12:04] Speaker 1: something that he can call a win, yet he seems
[12:08] Speaker 1: incapable of being able to engineer that win at this
[12:11] Speaker 1: point in time. So do you think there is still
[12:14] Speaker 1: a path there for some way for Trump to be
[12:18] Speaker 1: able to say, I've managed to get this concession from
[12:21] Speaker 1: Iran and we're done here?
[12:23] Speaker 3: Well, look, I think the truth is, if I were
[12:26] Speaker 3: advising President Trump, one thing you can't do is you
[12:30] Speaker 3: can't come out as the braggart that's declaring total victory
[12:37] Speaker 3: and expecting humiliation and supplication. Iran will never do. So
[12:44] Speaker 3: take that off the docket. That's number one. Number two
[12:48] Speaker 3: is the region, Saudi Arabia, the UAE, Qatar, Oman, Kuwait, Iraq,
[12:55] Speaker 3: the countries around that region who want to deal normally,
[13:00] Speaker 3: want to get back to normal. They want to get
[13:02] Speaker 3: back to normal with what Iran was doing. So there
[13:05] Speaker 3: is a way in which you can empower those parties
[13:09] Speaker 3: to to be the ones to set a new table
[13:11] Speaker 3: for negotiation and discussion, which the United States could be
[13:15] Speaker 3: the key part of. But get this out of U.S.
[13:18] Speaker 3: versus Iran alone. Bring in the other parties to stabilize that.
[13:22] Speaker 3: That's not peace. That's not love. That's not being great
[13:25] Speaker 3: friends like Donald Trump says. Oh, he was, you know,
[13:27] Speaker 3: framing it. Oh, Iran's going to be great. We're going
[13:29] Speaker 3: to kind of be buddies again. Forget that. So Donald
[13:32] Speaker 3: Trump has a pathway that's smart, that's realistic, that's sober,
[13:38] Speaker 3: that is stabilizing, and does not require a love fest.
[13:42] Speaker 3: And he can take that and that could get the
[13:44] Speaker 3: markets back in order. It could get trade and the
[13:47] Speaker 3: flow of this back together and just let the other
[13:49] Speaker 3: nations rise to sort of express. I think that's a
[13:52] Speaker 3: possible thing. But Donald Trump has got to drop a
[13:55] Speaker 3: lot of the bragging and the demand for humiliation from
[13:59] Speaker 3: Iran because Iran will say, guess what? We're going to
[14:02] Speaker 3: take whatever steps we have to take to deter you
[14:06] Speaker 3: and any other nation, particularly Israel, from thinking they can
[14:09] Speaker 3: just attack us anytime they want. We have resources and
[14:12] Speaker 3: we'll do this again if you do it again.
[14:18] Speaker 1: Well, Steve, thank you so much for your time.
[14:20] Speaker 3: Thank you.
[14:34] Speaker 1: Also in the news... Headline inflation has eased from 3.8%
[14:38] Speaker 1: to 3.5% in the year to July, but is significantly
[14:42] Speaker 1: higher than the 3.2% economists had been expecting. The RBA's
[14:47] Speaker 1: preferred measure of inflation was also higher than forecast, staying
[14:50] Speaker 1: at 3.6% for the third straight month. Economists say the
[14:54] Speaker 1: figures have increased the risk of a rate hike by
[14:56] Speaker 1: the Reserve Bank at its next meeting in September. And
[15:01] Speaker 1: tributes have poured in for country music star Dolly Parton,
[15:04] Speaker 1: who died yesterday after a brief battle with cancer. Fans,
[15:08] Speaker 1: friends and fellow stars have remembered her as an icon
[15:11] Speaker 1: of the music industry, businesswoman and philanthropist. In 2024, Dolly
[15:16] Speaker 1: Parton received the Peace Through Music Award, recognising her long-standing
[15:20] Speaker 1: contributions to education, healthcare and equality.
[15:23] Speaker 3: I'm Ruby Jones.
[15:24] Speaker 1: This is 7am. Thanks for listening.
[15:32] Speaker 2: Thank you.

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