Trump's fears about economy undercut US leverage in Iran talks

Magdalena Del Valle, Bloomberg News on Jun 20, 2026

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President Donald Trump said the prospect of global economic collapse was a big reason he signed an interim peace deal with Iran. That admission exposes a key U.S. weakness heading into the next round of talks with Tehran.

The memorandum of understanding that Trump signed on Wednesday reopened the Strait of Hormuz and set in motion waivers for sanctions on Iran’s oil sales to the international market. The effect was immediate: The price of oil tumbled further and U.S. stocks rose, facts that Trump pointed to at a press conference in France this week.

“I didn’t want to see economic catastrophe,” Trump said at a press conference in Evian, France on Thursday. “If you kept this going, that could’ve happened.”

That acknowledgment undercuts the U.S. negotiating position as the two sides plan to open talks in Switzerland on Sunday. Under the deal, they have 60 days to discuss imposing limits on Iran’s nuclear program and granting Iran economic relief. Knowing that Trump will be reluctant to restart the military campaign — and thus spark fresh economic turmoil — eases the pressure for Iran to end the talks quickly.

Indeed, even before the talks opened, Iran on Saturday announced it was closing Hormuz in response to new strife between Israel and Lebanon.

The pressure on the U.S. may only get worse. A prolonged conflict could trigger the deepest global slowdown in 40 years. At home, the war in Iran has proved deeply unpopular, with 56% of Americans saying it has impacted U.S. interests more negatively than positively, according to a poll from the University of Maryland.

With midterm elections approaching in November, members of Trump’s own party are raising concerns and the Republican-led House even voted to halt the war with Iran earlier this month.

“Taken as a whole, the 14 points in the MOU put Tehran in a strong negotiating position as the two sides tackle the nuclear file,” said Chris Kennedy, the economic statecraft lead at Bloomberg Economics and a former State Department official.

While U.S. officials have previously insisted that Iran’s nuclear program was important enough to justify going to war, Vice President JD Vance suggested this week it was already destroyed and appeared almost ambivalent about insisting the nuclear negotiations yield a breakthrough for Washington.

“Iran is weakened, their nuclear program destroyed, their economy in desperate straits, and if they change their behavior, big things are going to happen for Iran and for the war,” Vance said. “If they don’t, no skin off our backs.”

The problem for the U.S. is that the deal was skewed in Iran’s favor, giving the country broad gains before the next round of talks even begin. A Bloomberg Economics analysis of the 14-point agreement found that 10 points favored Iran versus just one advantaging the U.S., with the other three being neutral.

Under the memorandum, the U.S. is set to grant sanctions waivers for Iran to restart oil exports immediately and open the door for eventually ending all sanctions programs as part of the 60-day negotiations. Iran also gets a $300 billion development program to help with reconstruction after the conflict. The U.S. concessions have already prompted pushback and anger from Republican lawmakers.

Iran’s main concession is that it has essentially reaffirmed never to pursue a nuclear weapon, a promise it had already made under the 2015 nuclear deal. The U.S. may be able to reopen the Strait of Hormuz — the closure of which spiked global energy prices — but that waterway was open before Trump’s war.

The agreement also says the planned 60-day negotiating period is “extendable,” which raises the prospect that talks could drag on for many months. That’s an outcome that suits Iran more than it does the U.S., according to Miad Maleki, a former U.S. Treasury sanctions official who is now a senior fellow at the Foundation for Defense of Democracies.

“You don’t trade away your nuclear program for sanctions relief you’re already receiving,” Maleki said. “The U.S. can still escalate militarily, but it has dismantled its economic leverage at the exact moment it needs it most.”