Following the election of Donald Trump as the next U.S. president, Iran finds itself facing an unexpected turn in its geopolitical landscape, with a new administration likely to reintroduce strict sanctions that once brought the country’s economy to the brink. Tehran, which had reportedly supported Vice President Kamala Harris’s campaign to avert Trump’s return, now faces the challenge of preparing for renewed hostilities with man its leaders have publicly threatened for years.
Shortly after Trump’s victory, Iran’s Islamic Revolutionary Guard Corps (IRGC) released a provocative video, reiterating its longstanding threat against Trump, ending with footage of a bloodied image of him captioned, “We will finish the job.” IRGC’s latest message points to continued fallout from Trump’s authorization of the 2019 strike that killed General Qassem Soleimani, one of Iran’s top military figures. Since then, Iran’s leadership, particularly Supreme Leader Ayatollah Ali Khamenei, has vowed retribution, fueling tensions that Trump’s re-election has now reignited.
Economic Woes Worsen with Tumbling Rial
In wake of Trump’s electoral victory, Iran’s currency, rial, hit a record low on Wednesday, plunging to 703,000 rials per dollar before recovering slightly. Currency’s precipitous decline underscores anxiety spreading through Iranian markets and households, already burdened by economic difficulties. At the time of Iran’s 2015 nuclear deal with world powers, the rial was trading at 32,000 to the dollar—a stark comparison to today’s crisis levels.
Despite maintaining a substantial oil output, Iran faces escalating economic pressures. Under sanctions, Tehran’s ability to freely trade oil has been limited, forcing the government to rely on clandestine channels to sell crude and sustain its economy. Analysts suggest that a reintroduction of Trump’s “maximum pressure” campaign could cut into the revenue streams, severely impacting the Iranian government’s finances. Behnam Ben Taleblu, a senior analyst at the Foundation for Defense of Democracies, warned that Iran “can ill afford more economic shocks.” He added that the “return of maximum pressure alone to the Islamic Republic is going to cause major, major economic problems.”
Rising Regional Tensions and Iran’s Proxy Network
stakes are high in the Middle East, where Iran wields influence through a network of proxy forces, most notably Hezbollah in Lebanon and various factions in Iraq. Trump’s re-election comes at a time of heightened military exchanges between Iran and Israel, which responded to Iranian strikes on Tel Aviv last month with retaliatory raids on Iranian military installations. Ayatollah Khamenei has vowed harsh countermeasures, and experts suggest that Trump’s support for Israel will likely embolden Israeli forces.
However, some experts argue that Trump’s unpredictable foreign policy approach could lead Iran to be more cautious. “re’s unpredictability factor with Trump,” said Chuck Freilich, a former deputy national security adviser in Israel. Freilich highlighted that Iran might find Trump’s intentions harder to gauge compared to Biden’s more conventional diplomatic approach. “Iran doesn’t know what Trump will do. I’ll be more cautious with him than y would have been with Biden.”
Renewed Sanctions Likely
Under the Biden administration, the U.S. had adopted a more conciliatory stance on sanctions enforcement, allowing Iraq to continue importing Iranian energy and granting exemptions that allowed Iran to access billions in frozen funds. Biden administration argued that waivers were essential for humanitarian needs, though critics claimed that funds indirectly benefited Iran’s military forces. Trump’s re-election is expected to bring a swift reversal of this policy, cutting off critical revenue streams.
President-elect Trump’s previous “maximum pressure” policy had banned all U.S. persons from transacting with Iranian entities, and penalties extended to foreign companies dealing with Iran as well. Sanctions severely restricted Iran’s oil exports, undermining a key source of revenue for Tehran, which relies heavily on oil sales to fund its economy and its military.
Iran’s Official Response
Iranian government officials brushed off the implications of Trump’s election win, dismissing it as having little impact on national policies. “U.S. elections are not our business. Our policies are steady and don’t change based on individuals,” said government spokesperson Fatemeh Mohajerani, according to state-backed Tasnim News. However, broader economic impacts are clear, as ordinary Iranians already struggling under inflation and high unemployment are bracing for further hardships.
A Time of Decision for U.S. and Iran
prospect of heightened sanctions and military conflict brings critical decisions for both Washington and Tehran. Trump’s advisors have suggested that his administration may prioritize cracking down on Iran’s nuclear development, with some estimates indicating that Iran could develop a nuclear weapon within months if it resumed enrichment activities. In response, Trump has hinted at a zero-tolerance policy, signaling a return to hardline diplomacy in the region.
As Trump’s inauguration approaches, the coming months could set the stage for a shift in U.S.-Iran relations, and the world watches to see how Tehran will navigate this renewed challenge.
