As Washington and Tehran continue to exchange messages in the hope of another cease-fire, the Trump administration must face the realities that led it into a costly war to begin with. According to Foreign Policy, the administration has repeatedly fallen into the sunk cost fallacy, responding to strategic failure by acting as if the problem is simply one of scale or duration.
In fact, U.S. negotiating power has weakened as the war has dragged on. The United States is exhausting its munitions, and political consequences at home are mounting. New Houthi attacks on Saudi oil infrastructure have increased the instability in a conflict that has already sent global economic ripples, undermined U.S. credibility, and placed American allies in a region they had long wished to keep out of war.
Iran's Dilemma: Victory or Collapse?
While Iran’s position appears to harden, a prolonged war is not in its interest either. The regime has benefited from portraying itself as a victim of U.S. and Israeli aggression, yet it was already facing serious political and economic crises before the conflict began. Every day of war—and every bridge or business destroyed by warplanes—only delays Iran's path to recovery. But for Iranian leaders to believe in a return to stability, that recovery must look plausible.
There are certainly factions within Iran that prefer to see the war continue, but the majority of key decision-makers have expressed support for the June memorandum of understanding. They understand what many on both sides already see: the war cannot go on forever.
There remains a belief in Washington that enough pressure will force Iran to back down. For nearly 50 years, the U.S. has used military, economic, and political pressure to try to reshape Iran’s behavior. The result has been mixed at best. Pressure alone has had limited effect—often only when matched with incentives, alliances, and patience.
The June memorandum of understanding seemed to acknowledge this reality. It failed, however, for two key reasons. First, the language on the Strait of Hormuz in sections 4 and 5 was too vague, leaving room for both sides to accuse the other of failure. Second, decision-making in both Washington and Tehran is often driven by political survival in the short term rather than long-term strategic goals.
Influential groups in both countries prefer continued conflict to a diplomatic resolution. And each side, even as it struggles, continues to see itself as the winner. That perception will complicate any effort to reach a durable and meaningful settlement.
To end the war, the Trump administration must rethink its approach. Simply reducing the scale of military action or shortening the timeline is not enough. Negotiating leverage is slipping, as the United States runs low on supplies and domestic backlash grows louder. The recent Houthi strikes on Saudi oil exports highlight how volatile the situation remains. The war has already triggered economic shocks worldwide, damaged U.S. credibility, and forced regional allies into a conflict they never wanted to be part of.
Even though Iran's position seems more assertive, a prolonged war is not in its best interest. While the regime has gained political advantage by framing itself as the victim of U.S. and Israeli aggression, it was already dealing with serious economic and political issues before the conflict. Every day the war continues, and every bridge or business bombed by warplanes, pushes recovery further out of reach. For Iranian leaders to consider ending the war, they need to believe recovery is actually possible.
Despite factions in Iran that support continuing the war, most key decision-makers backed the June agreement. They recognize that the war cannot last forever. Both sides share a strong interest in ending the conflict. Yet, a simple deal to lower gas prices before the U.S. midterms will not suffice. A more lasting solution on the Strait of Hormuz is needed to avoid dangerous precedents for freedom of navigation. Such an agreement will require significant inducements for Iran in the near term. But combined with a broader strategy to strengthen Gulf allies and rebuild a consensus among U.S. allies on Iran policy, the United States can achieve the comprehensive solution Trump seeks.
Over nearly five decades, the U.S. has used all forms of military, economic, and political pressure to shape Iran’s behavior. But this has only worked occasionally, usually when pressure is paired with other tools like incentives, alliances, and patience. power, he will fail. The June agreement acknowledged this but still failed due to two main reasons. First, the language on the Strait of Hormuz was too vague, leading to accusations from both sides.
Groups in Washington and Tehran oppose a diplomatic solution in favor of continuing the war. Each side still sees itself as the victor, even as the conflict takes its toll. This mindset makes it hard to create a meaningful and lasting peace. But with a new approach, and a willingness to build trust and provide incentives, a durable solution is still possible.