The Failure of Operation Economic Outcast: Why Sanctions Against Iran Are Likely to Fail

The United States' latest sanctions on Iran, announced under the banner of "Operation Economic Outcast," are poised to be one of the most stringent in history. However, according to Jeffrey D. Sachs and Sybil Fares, experts in sustainable development and Middle Eastern affairs, these measures are unlikely to achieve their intended objectives.

Pakistan and China have recently declared their intention to defy the sanctions, signaling a global trend of resistance against the U.S. economic pressure. The sanctions, outlined by U.S. Treasury Secretary Scott Bessent, were billed as the "toughest sanctions in history," aimed at imposing "the greatest coordinated economic isolation" ever seen.

Despite six months of bombings and naval blockades, the U.S. has yet to secure a victory against Iran. The new strategy, according to Sachs and Fares, is to economically starve Iran into submission. This approach, they argue, is illegal, cruel, and destined to fail.

Historically, economic sanctions have failed to topple governments determined to endure them. They may impoverish populations and strengthen security services, but they do not bring down regimes. The authors also point out the economic implications of removing Iranian oil exports from a global market already grappling with a fifth of its supply due to the closure of the Strait of Hormuz.

The sanctions specifically target China, which imports over 80% of Iran's oil exports. The authors suggest that if the U.S. sanctions the Bank of China or the Industrial and Commercial Bank of China, Beijing will respond with measures that could severely impact the global economy.

This scenario echoes an earlier incident in 2025, where China imposed export licensing on heavy rare earths in response to U.S. tariffs. This led to assembly lines in the U.S. and Europe idling due to a lack of rare-earth magnets. The authors argue that Bessent's timing in announcing the sanctions is a trap for the U.S., as it coincides with the impending return of China's expanded rare earth export controls.

The authors assert that the sanctions are not just illegal under international law but also violate the UN Charter. The U.S., they argue, is increasingly isolated in its non-compliance with UN-based multilateralism. In 2026, Washington withdrew from over 60 international organizations and voted with the international majority in only five percent of UNGA resolutions.

The global community is taking note and responding accordingly. Countries are seeking new defense arrangements and moving away from dollar-based trade and U.S. treasury debt. They are also turning to China's open-weight AI models for their AI needs, rather than purchasing American proprietary models.

The authors draw a parallel between the U.S.-China rivalry and the Peloponnesian War, suggesting that the U.S. is taking a similar approach to that of the Athenian generals in taunting the people of Melos. However, history has shown that pride often precedes the fall. The authors conclude that the U.S. cannot expect other governments to follow it blindly into disaster.