Vance says Iran war entering 'new phase' focused on economic pressure

Zac Anderson, USA TODAYFri, August 21, 2026 at 3:17 PM UTC

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Vice President JD Vance said the Iran war is entering a "new phase" as the U.S. focuses on exacting economic pain on Tehran in an attempt to force a deal to end the conflict.

After months of targeting Iran's military and weapons production, Vance said in a Aug. 20 interview with The Clay Travis & Buck Sexton show that the "most effective tool" now is "the economic pressure we can apply to them."

The Trump administration launched new military strikes after a June peace deal broke down, but Iran continued to threaten shipping in the Strait of Hormuz, a vital waterway for oil transport. The reduced flow of oil through the strait has kept prices elevated.

"That has been the Iranian's leverage point. They are trying to close the strait down," Vance said.

Now the administration is signaling a shift away from military action, with President Donald Trump announcing in an Aug. 19 social media post that he is launching economic warfare against Iran on an "unprecedented scale," describing it as the "MOST CRUSHING ECONOMIC OPERATION EVER TAKEN AGAINST ANY COUNTRY!"

The president said "ECONOMIC D-DAY" is coming for countries that provide any type of economic "lifeline" for Iran, including allowing Tehran to use financial institutions or airports. Treasury Secretary Scott Bessent said additional sanctions are in the works.

Tehran responded to Trump's announcement with defiance. Iranian Foreign Minister Seyed Abbas Araghchi said it is "bound to fail."

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The U.S. tactical shift comes as negotiations have broken down between the two countries. No talks are taking place, as both sides dig in and the war continues with no end in sight.

Vance said the goal with the economic pressure campaign is to change Iran's "calculus" for "what kind of a deal they want to make."

"Do they want to have their economy strangled for the rest of time or do they want to have a better relationship with the west?" Vance asked.

The operation is not without economic risks for Americans, Vance said. Iran could retaliate by trying to further disrupt energy production and distribution in the region. Yet the vice president asserted that Iran will feel a much greater impact.

"This is a delicate dance," he said. "Because we apply economic pressure to them, they're going to apply economic pressure to us. But what has been true over the last couple of weeks is they've felt a lot more pressure than we have. We're going to keep that going."

Contributing: Francesca Chambers

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