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The United States' recent sanctions on Iran, codenamed "Operation Economic Outcast," are facing a critical failure, according to Jeffrey D. Sachs and Sybil Fares. The sanctions, announced by US Treasury Secretary Scott Bessent on August 24, 2026, were intended to impose "the greatest coordinated economic isolation in the history of the world." However, the authors argue that these measures are not only illegal and cruel but also destined to fail.
The sanctions were introduced amidst a backdrop of escalating tensions between the US and Iran. Despite six months of US bombing and naval blockade, the US has not achieved its objectives. Instead, the new strategy aims to "starve Iran into capitulation," according to Sachs and Fares. They emphasize that this approach is not only illegal under international law but also morally questionable.
The authors highlight the historical record, which shows that economic sanctions rarely bring down determined governments. Instead, they tend to impoverish populations, strengthen security services, and provide a rallying point for the targeted nation. They cite the example of the sanctions imposed on Iran under the Trump administration, which have failed to topple the regime despite their harshness.
Furthermore, Sachs and Fares argue that the sanctions are economically illogical. Bessent's plan to remove Iranian oil exports from a world already suffering from a fifth of its oil supply due to the closure of the Strait of Hormuz is seen as a recipe for stagflationary shock. Europe, Japan, and other US allies are being ordered to enforce sanctions that will throttle their own economies, they claim.
The authors place particular emphasis on the campaign's targeting of China, which buys more than 80 percent of Iran's oil exports. They warn that if the US sanctions the Bank of China or the Industrial and Commercial Bank of China, Beijing will respond by restricting its rare earth exports, a move that has already had significant impact in the past.
Sachs and Fares recount the events of April 2025, when China imposed export licensing on heavy rare earths in response to Trump's tariffs. This led to American and European automakers idling assembly lines due to a lack of rare-earth magnets. They remind readers that the April controls have never been lifted, and the suspension of the October measures is set to end in November, just before Bessent's announcement.
The authors also criticize the US for its unilateral approach to international relations. They point out that the US has withdrawn from more than 60 international organizations and has voted with the international majority in just five percent of recorded UNGA resolutions. This, they argue, has led to a situation where American security assurances are unreliable and relying on dollar-based trade leaves states vulnerable to US sanctions.
In conclusion, Sachs and Fares warn that governments around the world will not follow the US blindly into disaster. They cite the growing trend of countries turning to new defense arrangements and moving away from settlements in US dollars and reducing their holdings of US treasury debt. They also note the shift towards China’s open-weight AI models to meet AI needs, instead of paying for American proprietary models.
The authors conclude with a warning that the US' arrogance and its unilateral approach to international relations could lead to its downfall, much like the Athenian generals who were defeated by Sparta just a dozen years after taunting the people of Melos.
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