The hidden target in US war on Iran may be China

Trump has repeatedly cast Iran’s leadership as fractured and disorganized. In one post, he wrote: “Iran is having a very hard time figuring out who their leader is! They just don’t know!” describing “infighting” between “‘Hardliners,’ who have been losing BADLY on the battlefield, and the ‘Moderates,’ who are not very moderate at all.”

In a separate interview, he said: “They’re all messed up. They have no idea who their leader is… we took out, really, three levels of leaders.”

As speculation spread, President Masoud Masoud Pezeshkian sought to set the tone in a social media post declaring: “In Iran there are no ‘hardliners’ or ‘moderates.’ We are all Iranians and revolutionaries.”

The message was reposted verbatim by senior officials across the political and military establishment, including judiciary chief Gholam-Hossein Mohseni-Ejei, Vice President Mohammad-Reza Aref, senior advisers, and the Supreme National Security Council, underscoring the coordinated nature of the response.

Mohseni-Ejei went further in a separate post, directly attacking Trump and calling the labels “hardliner” and “moderate” “fabricated and hollow terms” borrowed from Western political literature.

The messaging blitz from Tehran followed the collapse of negotiations in Islamabad and reports that parliamentary speaker Mohammad Bagher Mohammad Bagher Ghalibaf—who led Tehran’s delegation there—may have stepped down from the negotiating team, fueling speculation over internal disagreements about talks with Washington.

Reports first circulated by Israel’s Channel 12 claimed Ghalibaf resigned following interference by the Islamic Revolutionary Guard Corps. Other reports suggested he was reprimanded for trying to include Iran’s nuclear program in discussions with the United States.

Hardline lawmaker Mahmoud Nabavian appeared to confirm tensions in a leaked audio recording, saying the team had discussed the nuclear issue “against the Supreme Leader’s position” and calling it a “strategic error.”

Saeed Saeed Jalili, widely rumored to be a possible replacement for Ghalibaf, struck a similar note while avoiding the exact phrasing, emphasizing “the unity of all segments of the nation” under the Supreme Leader.

The Supreme Leader’s official account also weighed in, warning that enemy “media operations” were aimed at undermining national unity and security.

Some analysts see Trump’s comments as deliberate pressure. Reformist journalist Ahmad Zeidabadi argued Trump was trying to “create division and conflict within the structure of the government” to present any eventual deal as “his complete victory.”

Ali Afshari, a US-based political analyst, described the remarks as “psychological warfare aimed at disrupting the cohesion of the opposing side.”

Yet even as officials insist on unity, conflicting signals from Tehran have deepened public uncertainty over negotiations and the future of the war.

Hardline lawmaker Ali Khezrian said the resumption of war was “inevitable” and claimed Iran had halted all communication with Washington.

Despite publicly dismissing reports of Ghalibaf’s resignation, parliament communications chief Iman Shamsaei said no new round of negotiations had been scheduled.

Journalist Saeed Agenji, meanwhile, insisted Ghalibaf still held “the helm of negotiations and domestic management of the country.”

Zeidabadi warned that mixed messaging over negotiations, ceasefire, agreement and even the ultimate goals of the war had left ordinary Iranians confused, risking reinforcing exactly the perception of disarray Tehran is trying to deny.

Magomed-Husejn Dovtaev, a 33-year-old Austrian national of Chechen origin, was freed last week after serving around 28 months of his sentence and returned to Austria, where authorities have indicated they will take no further action.

According to records cited by The Sunday Times, Dovtaev told a parole hearing he had been offered €50,000 to carry out reconnaissance on the broadcaster’s London office, describing the task as an opportunity “to make easy money.”

He admitted that the information he gathered could have been used to facilitate a potential terrorist attack, though the police were unable to prove who had tasked him with the operation despite strongly suspecting he was acting on the orders of Iran, according to The Times.

Dovtaev was arrested in February 2023 after filming security arrangements at Iran International’s headquarters at Chiswick Business Park. He was later charged with a single count of attempting to collect information "likely to be useful to a person committing or preparing an act of terrorism."

During the course of the trial, the police released footage of Dovtaev gathering information around the office building that housed Iran International and recording videos of the area.

Prosecutors said Dovtaev covertly filmed material on his phone in order to "identify vulnerabilities" in the media company's security which could be exploited by others for terrorism.

During a hearing on March 19, 2026, "Dovtaev told the panel that he had been given an opportunity to make ‘easy money’, where he would be paid fifty-thousand euros [£43,347] to go to the [Iran International] building and undertake reconnaissance because two business partners were in dispute.”

“Mr Dovtaev has accepted that it was likely he was being used to gather intelligence on the security situation at the building, with a possible terrorist attack to follow," according to a summary of the hearing reviewed by The Times.

After the hearing, the parole panel concluded he no longer posed a risk to the public, noting his actions were driven by “greed” and “recklessness” rather than ideology.

Threats continue

On February 18, 2023, a week after Dovtaev's arrest, Iran International announced that it decided to temporarily move its studio operations to the United States upon the order of UK anti-terrorism officials.

After months of hiatus in broadcasting from the UK due to terrorist threats by Tehran, the network resumed operations from a new London building on September 25, 2023.

However, an incident earlier this month showed the network remains under threat.

On April 17, 2026, British police charged three people over an attempted arson attack near the London offices of Iran International.

Police said a burning container was thrown towards the broadcaster’s headquarters in north-west London. No one was injured, but the case has added to concerns about the safety of Persian-language media in Britain.

In a separate case on April 18, Iran International received reports that an Iranian man was violently assaulted in central London. The Metropolitan Police are understood to be investigating.

The cases have drawn renewed attention to concerns among British officials over the use of criminal proxies by foreign states, including Iran, to carry out surveillance and attacks while maintaining plausible deniability.

On Thursday, UK Prime Minister Keir Starmer voiced concern over Tehran’s activities in the United Kingdom, saying he was “very worried” about the increasing use of proxies by foreign states including the Islamic Republic.

He pledged to introduce legislation to proscribe Iran’s Islamic Revolutionary Guard Corps (IRGC) in the next parliamentary session. “We go into a new session in a few weeks' time, and we'll bring that legislation forward."

Iranian Foreign Minister Abbas Araghchi was in Islamabad on Saturday, where he met Pakistani Prime Minister Shehbaz Sharif and army chief Asim Munir as Pakistan continued efforts to mediate between Tehran and Washington.

A Pakistani source involved in the talks told Reuters that Araghchi conveyed Tehran’s demands and concerns about US positions during the visit. Iranian state media also said he delivered Iran’s response to proposals in a meeting with Munir before leaving Islamabad for Oman and Russia.

Iranian officials had earlier said Araghchi had no plan to meet US officials in Pakistan.

Lake, a journalist at The Free Press and host of the Breaking History podcast, told Eye for Iran that the Islamic Republic is seeking negotiations as a lifeline after major military, economic and political setbacks.

“Their backs are against the wall and these negotiations they hope are going to be a lifeline,” Lake said.

But he argued that any renewed diplomatic track should begin with pressure on Tehran over the Iranian people.

“If I was Vice President Vance, I would say… the first thing I’d say is, you need to turn back on the internet if you’re going to get these financial lifelines. You need to release political prisoners,” Lake said.

He added that Washington should also demand an end to executions.

The remarks come as Iran’s internet blackout has entered its 57th day, according to NetBlocks, with international connectivity still largely severed amid worsening conditions inside the country.

• 

  Internet Pro or Censor Pro? Iran rolls out a new service

Lake said the US should recognize that “our best allies are the Iranian people on the ground,” and warned against strikes on civilian infrastructure such as power plants, saying they would hurt ordinary Iranians more than the Islamic Republic.

The diplomatic maneuvering has also unfolded amid signs of deepening disagreement inside Tehran. Mohammad Bagher Ghalibaf, the parliament speaker, has stepped down as head of Iran’s negotiating team amid internal disputes, with Saeed Jalili floated as a possible replacement and Araghchi seeking greater control of the talks.

Lake said he believes the fractures inside the Islamic Republic are genuine.

“At the end of the day, with enough pressure, they’re probably going to start turning on each other,” he said.

He argued that the Islamic Republic has lost legitimacy and that Iran’s future will ultimately be decided by Iranians themselves.

“You cannot keep these people down,” Lake said..

Over the next two to four months, Iran’s economic conditions are expected to continue deteriorating sharply, with high inflation, rising unemployment, falling real incomes, and significant stress across key industries, the external sector, and the financial system, amounting to severe stagflation.

The economy entered the recent war from a weak starting point, and the combined effects of war-related damage, financial strain, and policy responses are likely to intensify these pressures.

Under a continued ceasefire, the deterioration is expected to be gradual but persistent; under a strictly enforced naval blockade, the adjustment is likely to be faster and more severe, with risks of very high inflation and broader economic disruption.

However, hyperinflation and full economic collapse are less likely in the next two to four months. An effectively enforced blockade, combined with military operations focused on reopening and securing the Strait of Hormuz, will push Tehran to the edge of economic collapse.

Starting point: A weak economy before the war

Iran entered the war from an already fragile position. By late 2025, inflation was elevated above 50 percent, the rial had lost substantial value, and the banking system was under visible strain, notably by the collapse of Bank Ayandeh. These pressures had already reduced household purchasing power and severely weakened business activity.

The continued depreciation of the currency, which saw the rial lose more than 20 percent in less than 20 days by the end of 2025, and worsening economic conditions contributed to widespread unrest across the country, which was ultimately suppressed. This left the economy highly vulnerable even before the war began.

Impact on income-generating industries

The war has directly affected Iran’s main sources of export revenue. Damage to industrial infrastructure—especially in petrochemicals and metals—has disrupted sectors that generated roughly $25–30 billion in exports in 2024 (petrochemicals: $13–17 billion; metals: $12–13 billion).

Production in these sectors is now constrained by:

• Physical damage to facilities, and utility infrastructure
• Shortages of inputs and spare parts
• Limited access to financing and foreign exchange

Even partial restoration of operations is expected to take time, and exports from these industries are likely to decline sharply in the near term.

Spillovers to other sectors are also significant. In the agriculture sector, fertilizer shortages and disrupted logistics are expected to reduce output. Heightened uncertainty, combined with likely shortages of steel and possibly cement, is contributing to a significant slowing of activity in the construction sector, particularly in private projects. The auto sector is also likely to suffer a setback due to the lack of steel and aluminum.

Internet blackout and business disruption

Domestic policy responses have added further strain. The widespread internet blackout has severely disrupted economic activity, especially small and medium-sized businesses reliant on digital platforms.

According to NetBlocks, the economic cost of internet shutdowns in Iran has been estimated to be at least $37 million per day during recent outages.

The blackout has:

• Disrupted online sales and payment systems
• Interrupted supply chains and coordination
• Reduced access to information and markets

These effects extend beyond online businesses and have slowed activity across the broader economy.

Financial system stress

The financial system, already under pressure before the war, is facing increased risks. The collapse of Bank Ayandeh in December 2025 highlighted underlying vulnerabilities in the banking sector. Other large banks were already under strain prior to the conflict.

Current conditions may lead to:

• Reduced lending as banks conserve liquidity
• Increased risk of bank distress if access to funding tightens
• Potential loss of confidence affecting deposits and payment systems

The disruption of the private trade credit system—often based on post-dated checks—has further constrained business financing. Recent signals from the judiciary suggesting reduced legal consequences for unpaid checks have weakened enforcement, discouraging sellers from extending credit and further restricting transactions.

Impact on households

Households are expected to reduce spending significantly. Private consumption accounts for roughly 50 percent of the economy, so this contraction will have broad effects.

Key drivers include:

• Rising prices and declining real incomes
• Increased uncertainty leading to precautionary saving
• Reduced access to credit
• Wealth effect due to declines in asset values, particularly equities in sectors affected by the war and the closure of Tehran Stock Exchange.

These factors point to rising unemployment, a notable decline in private consumption, and a broad and significant decline in living standards.

Economic conditions over the next 2-4 months

Scenario 1: Continuation of ceasefire with the US and Israel

Under this scenario, large-scale hostilities do not escalate further, and oil exports continue, although under constraints. However, petrochemical and metals exports remain significantly disrupted due to infrastructure damage and ongoing restrictions on trade and financial channels, including limited access to regional intermediaries such as the UAE.

In this environment:

• Oil revenues continue to provide limited foreign currency inflow
• Inflation remains around current high levels due to currency weakness and supply disruptions
• Industrial activity remains below capacity
• The banking system remains under pressure but avoids immediate systemic collapse

Economic conditions continue to deteriorate, with persistent pressure on household incomes and employment. The rial is likely to remain under depreciation pressure, sustaining elevated inflation in the 50-60 percent corridor. Resource allocation is expected to be heavily tilted toward military rebuilding—particularly missile and defense capabilities—while remaining funds are directed toward essential imports such as food and medicine.

Scenario 2: Rigorously enforced naval blockade

Under this scenario, a naval blockade is strictly enforced following recent actions by the United States administration. Iran would be largely unable to export oil through the Persian Gulf, with only limited alternative channels (such as “ghost fleet” activity) available.

In this case:

• Foreign currency inflows drop sharply
• The rial depreciates further, leading to a rapid acceleration in inflation
• Imports become severely constrained, limited to mainly essential goods
• Industrial activity declines further due to lack of inputs and financing
• Pressure on the banking system intensifies as liquidity conditions worsen

The loss of oil export revenue significantly weakens the government’s ability to stabilize the economy. Note that the “ghost fleet” overseas is likely to continue generating revenue for the next two to three months.

However, if the blockade is expected to continue, the government will ration this revenue for the near future. Inflation would rise sharply but most likely will not break the 100 percent ceiling, and the risk of broader economic breakdown increases, particularly if access to foreign currency becomes severely limited.

As in the first scenario, despite the dire economic situation, the government is expected to prioritize military spending to rebuild defense capabilities and prepare for future conflict.

Remaining resources would be directed toward securing basic goods such as food and medicine. Under a strict blockade, however, even if essential goods remain available, high inflation and rising unemployment would leave many households unable to afford them, sharply reducing living standards and intensifying public discontent. Even so, a full-scale economic collapse or hyperinflation is not expected within the next two to four months.

Scenario 3: Naval blockade plus major military operation in Iran's south

Under this scenario, strict enforcement of the naval blockade is coupled with a major military operation focused mainly on the south of Iran to reopen and secure the Strait of Hormuz.

Such an operation would render Iran not only unable to export oil but would also disrupt most of its trade through the Persian Gulf, including the import of food and other essential goods.

Securing basic goods would become extremely difficult for the government, which would be diverting its limited resources toward active military confrontation. Most economic activities are likely to come to a halt as inputs become extremely scarce and uncertainty rises sharply.

Inflation would spiral out of control, prompting the government to impose stricter limits on the payment system to prevent hyperinflation. These measures would, in turn, hinder economic activity even further. A full economic collapse within two to four months would not be inevitable, but it would remain a distinct possibility.

Starmer said legislation would be brought forward “in a few weeks” as parliament reconvenes.

“In relation to malign state actors more generally, proscription, we do need legislation in order to take necessary measures, and that is legislation that we're bringing forward as soon as we can.”

“We go into a new session in a few weeks' time, and we'll bring that legislation forward,” he said.

He also voiced concern over Tehran’s activities in the United Kingdom, saying he was “very worried” about the increasing use of proxies by the Islamic Republic.

Starmer made the remarks during a solidarity trip to Kenton United Synagogue on Thursday.

The visit came on the eve of the court appearance of two men accused of spying on Jewish and Israeli targets in London on behalf of the Iranian intelligence.

Nematollah Shahsavani, 40, and Alireza Farasati, 22, face charges under the UK’s National Security Act of engaging in conduct likely to assist a foreign intelligence service. Prosecutors allege the activity was carried out for Iran.

Growing threats

Starmer's pledge to ban Iran's IRGC comes at a time of growing concern about threats, intimidation, and violence affecting people linked to Iran in Britain.

On April 18, Iran International received reports that an Iranian man was violently assaulted in central London. The Metropolitan Police are understood to be investigating.

On April 17, British police charged three people over an attempted arson attack near the London offices of Iran International.

Police said a burning container was thrown towards the broadcaster’s headquarters in north-west London. No one was injured, but the case has added to concerns about the safety of Persian-language media in Britain.

Before that, in March 2026, an Iran-aligned group was reported to have claimed responsibility for an arson attack on Jewish ambulances in Golders Green, north London.

In May 2025, three Iranian men were charged under the National Security Act after a major counter-terrorism investigation. Prosecutors said one of the men had carried out surveillance, reconnaissance, and online research with the aim of committing serious violence against a person in the UK.

The other two were accused of similar activity intended to help others carry out serious violence. The Home Secretary said the case was part of a broader response to threats linked to the Iranian state.

British authorities have warned for several years that Iran poses a serious threat on UK soil.