Trump’s return to the White House means Iran must tread carefully

The remarks laid bare the extent of the crisis. The Iranian government struggled to keep its oil tanker fleet operational amid the sanctions and encountered significant obstacles in finding buyers for its oil.

The Iranian rial dramatically devalued, hitting record lows during Trump's presidency. Meanwhile, inflation soared to unprecedented levels, eroding the purchasing power of ordinary Iranians. Unemployment rates surged, leaving millions of Iranians grappling with financial insecurity.

The Trump administration's resolve to enforce sanctions had a chilling effect globally. Many countries and international corporations, wary of potential US retaliation, avoided violating these sanctions.

Fears of economic or diplomatic consequences ensured that Tehran was effectively cut off from much of the global market, further exacerbating its financial woes. Iran's already fragile economy was pushed to the brink, creating widespread discontent and unrest within the country.

Political blows

On the political front, the maximum pressure policy further isolated Iran in the Middle East. Tehran's ability to finance and support its regional proxies—groups that had long been instrumental in projecting Iranian influence—was severely hampered. The policy disrupted funding channels, making it increasingly difficult for Iran to sustain its activities in countries such as Syria, Iraq, Lebanon, and Yemen.

Adding to this political isolation was Trump's willingness to take unprecedented actions, most notably the assassination of General Qasem Soleimani—a revered figure within Iran's military and political establishment. Soleimani's killing in January 2020 was a major blow to Tehran's regional strategy and a stark demonstration of Trump's readiness to escalate tensions.

For Iranian society, the economic pressure applied during Trump's first term led to widespread public uprisings, further intensifying the challenges faced by the regime. Protests erupted across the country in response to skyrocketing inflation, unemployment, and the rising cost of living, as citizens expressed their frustration with government mismanagement and corruption.

The most notable of these uprisings occurred in November 2019, triggered by a sudden increase in fuel prices. Demonstrations quickly spread to over 100 cities and towns, evolving into a broader critique of the regime's policies and governance.

The government's harsh response included widespread internet blackouts and a brutal crackdown by security forces. It resulted in hundreds of deaths and thousands of arrests. These events not only underscored the growing disconnect between the Iranian government and its people but also highlighted the fragility of the regime's domestic stability under the strain of US sanctions. The unrest weakened Iran internally and signalled to its adversaries the extent of its vulnerabilities, amplifying the pressure Tehran faced on all fronts.

Different dynamics

As Iran contemplates the implications of Trump's return, it must consider whether the dynamics between the two countries will shift in his second term. A critical factor distinguishing this period is the heightened tensions between Iran and Israel.

The shadow war that characterised their conflict in previous years has escalated into more direct confrontations, including missile strikes, setting a dangerous precedent. Israel's influence on US foreign policy is undeniable—particularly under a Republican administration. As a key ally, Israel's security concerns often weigh heavily on American decision-making in the region.

Trump's reported remark to Israeli Prime Minister Benjamin Netanyahu—quoted as "do what you have to do"—reflects his administration's unwavering support for Israel's actions against Iran. This dynamic raises the stakes for Tehran, as any direct conflict between Iran and Israel could draw the US into the fray.

Tehran is acutely aware of this risk. A full-scale confrontation with Israel would not only escalate regional instability but also invite severe retaliation from the US. Iran's leadership must navigate this volatile environment carefully, balancing its regional ambitions with the need to avoid provocation.

Compounding Iran's difficulties is the Republican Party's control of the House of Representatives, coupled with Trump's presidency. This consolidation of power creates a unified front in Washington that will likely make things harder for Iran.

Historically, Republicans have adopted a hardline stance on Iran, consistently advocating for stringent sanctions, increased military deterrence, and a more aggressive foreign policy aimed at curbing Tehran's regional and nuclear ambitions. With a Republican-dominated House, any diplomatic efforts to ease tensions or negotiate relief from sanctions are likely to be met with significant resistance.

The potential support in the legislature for Trump's maximum pressure policy not only strengthens its implementation but also ensures that the administration has the political backing necessary to escalate measures against Iran if deemed necessary.

For Tehran, this political landscape leaves little room for manoeuvre. It must contend with a US administration determined to exert maximum pressure, reinforced by a Congress that shares similar hawkish views. This alignment between the executive and legislative branches could result in an even more coordinated and unrelenting approach to isolating Iran, further limiting its economic, political, and regional options.

Cautious approach

Given these challenges, Iran appears to be adopting a more cautious approach. Following Trump's re-election, Tehran toned down its rhetoric about retaliating against Israel for the October strikes. Similarly, Iran has provided written assurances to the US that it will not attempt to assassinate Trump, signalling a strategic retreat aimed at de-escalating tensions. This calculated restraint reflects Iran's recognition of the precariousness of its position.

While Tehran remains committed to defending its interests, it understands the risks of further provoking a US administration that has already demonstrated its willingness to take bold and decisive actions.

But despite their adversarial relationship, there could be a window for diplomacy. Trump has previously expressed openness to negotiating a new nuclear deal, describing it as a potential "landmark" agreement. From Iran's perspective, engaging in such negotiations could provide a pathway to easing sanctions and stabilising its economy.

However, the prospects for a meaningful agreement are complicated by the heightened tensions with Israel and the Republican-controlled US government. Even with the potential for dialogue, the likelihood of Trump reactivating the maximum pressure doctrine remains high.

With the backing of a Republican-dominated government, this policy could be implemented with even greater force and precision. The objective would be to push Iran's government to the brink of financial collapse, limiting options.

Higher stakes

The stakes are particularly high in this second term as Trump seeks to consolidate his legacy. A renewed maximum-pressure campaign would aim to achieve not only economic devastation but also political concessions from Tehran. Iran's leadership must brace itself for the possibility of an even more aggressive US stance—one that leaves little room for compromise.

Trump's re-election presents Iran with a formidable challenge. Drawing on the lessons from his first presidency, Tehran is preparing for a period of heightened economic and political pressure. The dynamics of this second term are shaped by an intensification of US-Iran tensions, compounded by Israel's escalating conflict with Tehran and the Republican Party's hardline approach.

In this precarious environment, Iran's leadership will tread carefully. Whether through military restraint, diplomatic overtures, or strategic recalibrations, Tehran's decisions will play a critical role in shaping its future relationship with the US. As the world watches, the stakes could not be higher for Iran, the region, and the broader international community.