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President Trump's economic assault on Iran has drawn a fraction of the attention devoted to his bombing campaign, even as senior U.S. officials believe it may ultimately do more damage to the regime in Tehran.

Why it matters: U.S. intelligence and open-source media reports point to a deepening economic crisis inside Iran, including gasoline shortages in one of the world's most oil-rich countries.

"The Iranians want to stop being bombed and they want money," a senior administration official said. "But that's almost in reverse order. They really want the money first."

Driving the news: Trump, who paused U.S. strikes against Iran over the weekend after 13 consecutive days of attacks, said Monday that Tehran had requested a meeting to discuss a deal.

Iranian Foreign Ministry spokesperson Esmaeil Baghaei denied that claim.

Both sides are talking to mediators, led by Oman, Qatar and Pakistan, who are seeking to convert the pause in fighting into a durable new ceasefire.

Zoom in: A major focus of the talks is a proposal that would give Iran and Oman a measure of authority — and potential revenue — in managing traffic through the Strait of Hormuz.

The arrangement would draw elements from the cooperative framework used by Malaysia, Singapore and Indonesia in the Straits of Malacca and Singapore.

"Some of the Iranians want this. Others don't. That's part of the issue," the senior administration official said.

Iran wants assurances it won't be attacked again by the United States.

It also wants money — both unfrozen assets and freedom from U.S. sanctions and its blockade.

Trump is wary of rewarding Iran for disrupting traffic through the strait and is demanding that Tehran surrender its remaining nuclear material.

Zoom out: A second U.S. official acknowledged that sanctions and the U.S. naval blockade will take longer to force Tehran to the table than a full-scale bombing campaign, which Trump has so far declined to authorize.

That prolonged timeline could deepen Republicans' political exposure, leaving them to defend an unpopular war and elevated gas prices through the midterm campaign.

"I have a lot of patience," Trump told reporters Monday. 

Between the lines: "Intelligence is picking up that the Iranians are complaining they can't pay their fighters," a U.S. official said. "Why? Because of the financial pressures. Because of Treasury. Because of what [Treasury Secretary] Scott Bessent is doing."

"They're in danger of runs on banks. There are gasoline shortages in this giant oil-rich country," the official added. "They're more scared of Treasury than the War Department."

Inside the room: In prior talks with U.S. negotiators Jared Kushner and Steve Witkoff, the Iranians made clear that gaining access to money was a central priority, according to U.S. officials.

"They're begging Steve and Jared for cash. They're desperate for it," one of the officials claimed.

The Trump administration has imposed sanctions on more than 1,000 people, vessels and aircraft under its revived maximum-pressure campaign, targeting Iran's oil trade, shadow banking system, weapons procurement and shipping networks.

Under its reimposed blockade, the U.S. is stopping, disabling and firing upon Iranian vessels.

The intrigue: Trump has said he paused the bombing to give diplomacy a chance. His decision also followed a warning from Joint Chiefs Chair Gen. Dan Caine about pressure on U.S. weapons stockpiles in Central Command, especially supplies of air-defense interceptors, sources told Axios.

The senior U.S. official described Caine's warning as standard military procedure.

"The overall stockpiles aren't depleted or at zero," the official said. "When you have to consider pulling from stockpiles around the world, that comes with risks, and you have to present that to the commander in chief. He decides. He's the decider."

Yes, but: Critics of Trump's war efforts say the president has few attractive options and question whether either military strikes or economic pressure will force Iran to accept his terms.

Iran generated an estimated $23 billion in oil revenue during the first half of the year — exceeding its budget projections — according to Brett Erickson, an analyst with Obsidian Risk Advisors.

"Economic warfare is a fundamentally broken approach to the Iran War," Erickson wrote Monday on X.

What they're saying: White House press secretary Karoline Leavitt told Axios that Trump "prefers a diplomatic solution, but he continues to retain all options if Iran continues terrorist activities in the Strait of Hormuz or against allies."

"Combined with successful sanctions that have crippled Iran's economy and 13 straight days of strikes against military targets in response to their repeated aggression, it would be wise for Iran to work toward a negotiated deal," she said. "Otherwise, they know what will happen."

Said another U.S. official: "The president has a win-win optionality. The U.S. is capable of prosecuting this militarily to the fullest extent. And the U.S. is capable to exerting economic sanctions that cripple Iran."

Go deeper: Trump to Axios: I'm ready for "strong military action" if Iran talks fail

warning from Joint Chiefs Chair Gen. Dan Caine

Trump to Axios: I'm ready for "strong military action" if Iran talks fail

U.S. officials believe sanctions could hurt Iran more than bombs

"I have a lot of patience," Trump said Monday.

Treasury Secretary Scott Bessent. Photo: Andrew Harnik/Getty Images

Donald Trump

Geopolitics & international conflict

Iran

U.S. politics & policy

2024 will be an election year like no other, as President Biden seeks re-election amid economic uncertainty, two wars and questions about his age. His likely foe, former President Trump, faces felony charges and vows revenge on his political enemies. Meanwhile, Americans generally are dissatisfied with those choices and are divided over immigration, race, education and more.

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Conflicts, policies and powers are intersecting and shaping the world. Breaking news and analysis of national security, foreign policy and global crises.

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Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

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The small businesses behind high-profile legal challenges to President Trump's trade agenda are suing again to block his latest import taxes.

Why it matters: The lawsuits set up another legal test of Trump's tariff agenda after courts this year rejected one tariff regime and another remains tied up in court.

What's new: One lawsuit was filed on behalf of Burlap & Barrel, which previously challenged Trump's temporary Section 122 tariffs, and watch retailer Collective Horology. 

The other was brought by toymaker Learning Resources, along with a flooring manufacturer and affiliated firms.

Learning Resources was a party to the consolidated Supreme Court litigation in which the justices invalidated Trump's emergency powers tariffs, though its own case was dismissed on jurisdictional grounds.

Catch up quick: The lawsuits challenge the administration's new tariffs imposed under Section 301 of the Trade Act, which took effect last week as the White House's temporary Section 122 levies expired. 

The action generally imposes tariffs of 10% or 12.5% on imports from more than 60 economies that the Trump administration says failed to adequately block goods made with forced labor.

What they're saying: The Liberty Justice Center, representing Burlap & Barrel and Collective Horology, argues that the administration stretched what Congress intended as a targeted trade remedy into a sweeping global tariff regime.

U.S. Trade Representative Jamieson Greer "determined the tariff rates first ... and assembled economy-specific findings afterward to justify them," the public interest law firm, which previously represented businesses challenging Trump's tariffs, alleges in a complaint.

The suit filed on behalf of Learning Resources says Trump officials relied on generalized findings rather than demonstrating how each country's practices burdened U.S. commerce, as the statute requires.

The complaint alleges that the administration imposed the same set of sweeping global tariffs after earlier legal defeats: "The third time's not the charm," the complaint says.

What they're saying: Collective Horology co-founder Asher Rapkin tells Axios that the earlier tariff regimes cost the watch retailer more than $160,000, with refunds from the earlier invalidated tariffs still outstanding.

"Section 301 tariffs are most definitely going to hamstring my business in the exact same way that the previous two phases of tariffs have," Rapkin says.

The company imports watches from Switzerland, where Rapkin says there is virtually no U.S. manufacturing alternative.

Flashback: Courts have already rejected Trump's first attempt to impose sweeping tariffs under emergency powers, while a separate challenge to his temporary replacement tariffs under Section 122 remains on appeal. 

Now: The challenge has shifted from whether the administration has tariff authority to how officials are exercising their trade power.

The other side: The White House says the tariffs lawfully target foreign failures to block forced labor imports.

"Section 301 tariffs have proven to be a legally durable tool since the President's first term, and they remain so now," White House spokesman Kush Desai tells Axios in a statement.

The bottom line: Small businesses have been consequential players in the fight over Trump's tariff power, repeatedly forcing the administration back into court as it pivots from one legal authority to the next.

Editor's note: This story was updated with comment from the White House. This story was corrected to clarify Learning Resources' role in the Supreme Court litigation over President Trump's emergency powers tariffs.

Small businesses launch new Trump tariff challenge

The lawsuits set up another legal test of Trump's tariff agenda.

Illustration of a cargo container replacing one half of the scales of justice. 

Supreme Court & legal decisions

Tariffs & trade policy

Latest news on Wall Street, Corporate America and financial regulation.

Business

Senate Majority Leader John Thune is pulling off something today's Republicans rarely attempt: telling President Trump "no."

Why it matters: Pressure from Trump and the MAGA base is piling up on Thune (R-S.D.), especially over a voter ID bill, but he has an important insurance policy: GOP senators have his back.

"I think he's got strong support. I read all the stories, but I think mostly that's made up by reporters," Sen. Mike Crapo (R-Idaho) told Axios. 

"Leaders absorb some of the punishment, but I think he's doing great. No one could do a better job than he is right now," Sen. Roger Marshall (R-Kan.) told Axios.

"His cred in the conference has never been stronger," Sen. Kevin Cramer (R-N.D.) told Axios.

Catch up quick: Trump's frustration with Thune over the inability to pass the SAVE America Act or nuke the filibuster is, again, bubbling over.

"Thune should not allow the United States  Senate to 'leave town' until it passes The Save America Act or, far better still, TERMINATES THE FILIBUSTER," Trump demanded on Truth Social on Monday morning.

Thune has snapped back, reiterating that it is a matter of math. There are not enough votes to pass SAVE, end the filibuster or justify canceling the August recess.

"Give me a rationale or a path to getting success, staying here through the month of August," Thune told reporters Monday about the calls from Trump and a few GOP senators to cancel recess to pass SAVE. "You could stay here til Christmas."

What to watch: Trump has not called for Thune's ouster. He even told reporters Monday that their relationship is "fine." But the building anger has fueled widespread speculation in D.C. that the president could eventually go there.

Even if he does, it would not carry the same weight as a threat to Speaker Mike Johnson's leadership in the House.

For one, Senate leadership elections are conducted by private ballot, giving more cover to senators who may not want to publicly cross Trump.

What we're hearing: Many Republican senators are quick to share their support for Thune behind closed doors, even if not all are willing to publicly do so right now.

Thune "is not in jeopardy," a GOP senator told Axios, requesting anonymity to speak candidly. "He is not the problem."

"We have a bunch of people across Capitol Hill that are obsessed with social media fame," another senator told Axios, referring to those questioning Thune's leadership.

Senior GOP aides for other senators also tell Axios the problem is really "squeaky wheels" getting more attention and that the situation could ultimately benefit Thune within the conference.

The other side: A conservative corner of the conference is certainly growing frustrated with Thune. 

Seven senators are now calling to delay the August recess until SAVE is passed: Mike Lee (R-Utah), Rick Scott (R-Fla.), Ashley Moody (R-Fla), Jim Banks (R-Ind.), Tommy Tuberville (R-Ala.), Bill Hagerty (R-Tenn.) and Darline Graham (R-S.C.)

But even some of them admit Thune's leadership is not at stake.

"I wouldn't say that, because his job lies with us," Tuberville said when asked about any risk to Thune's position as leader. "But a lot of people are getting a little bit frustrated." 

The bottom line: "I've been somewhat disappointed more Republican senators haven't been bold enough to speak out," Cramer said.

— Axios' Kate Santaliz contributed to this story. 

Thune's shield against Trump

"I read all the stories, but I think mostly that's made up by reporters."

Senate Majority Leader John Thune talks with reporters at the U.S. Capitol on July 23.

Senate Majority Leader John Thune talks with reporters at the U.S. Capitol on July 23. Photo: Nathan Posner/Anadolu via Getty Images

Markets

Axios Markets

Anthropic CEO Dario Amodei said Monday that he has "never advocated" for a ban on open-weight AI models, rejecting accusations that his lab is seeking to shield its closed-model business from competition.

Why it matters: Anthropic has become the most prominent holdout from a new industry push to defend open-weight AI, after Nvidia, Microsoft, Meta, Google, OpenAI and dozens of other companies signed a letter urging Washington not to restrict the technology.

The push was triggered by the shock debut of Kimi K3, a Chinese open-weight model that rattled Silicon Valley by approaching U.S. frontier performance at a fraction of the cost.

The Trump administration has weighed taking action against open-source models, including sanctions against Chinese labs accused of stealing U.S. AI research through "distillation."

Driving the news: "Anthropic has never advocated for a ban on open-weights models," Amodei wrote in a new blog post, calling models without dangerous capabilities "a public good."

He argued that a ban on Chinese open models would do little to stop the actual threat, since "bad actors are unlikely to be legitimate US businesses."

He acknowledged a ban would shield U.S. labs like Anthropic from competition — but insisted "that has never been my goal."

Between the lines: Amodei is trying to draw a narrow line between opposing open-weight bans and supporting tougher controls on the most powerful AI systems.

The Anthropic CEO said he agrees that open models can expand access, competition and customer control.

But he rejected the letter's claim that open-weight models necessarily make AI safer or give cyber defenders an advantage over attackers.

Zoom in: Instead of a ban, which he said "would not address my most serious national security concerns," Amodei called for three narrower policies:

Tighter controls on advanced chips and chipmaking equipment flowing to authoritarian governments, including the Chinese Communist Party.

A crackdown on "industrial-scale distillation," or training models on the outputs of more advanced systems.

Mandatory safety testing for sufficiently capable models, whether open or closed.

Catch up quick: Anthropic faced criticism after it declined to join Nvidia CEO Jensen Huang's open-weight letter.

Google and OpenAI, Anthropic's two biggest closed-model rivals, signed on this weekend after originally abstaining. Anthropic still has not.

Its absence fueled accusations — including from White House AI adviser David Sacks — that the company was using safety concerns to defend its own business model.

The bottom line: Amodei doesn't want Washington to ban open models. He wants Washington to regulate the chokepoints — chips, distillation and safety testing — that determine how powerful those models can become.

Anthropic CEO Dario Amodei says he does not support open-weight AI ban

Amodei argued that a ban on Chinese open models would do little to stop the actual threat.

Dario Amodei. Photo: Anna Moneymaker/Getty Images

AI & machine learning

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Privacy & tech regulation

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Tech Regulation

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

A bar chart that shows expertsâ estimated likelihood of AI-related catastrophic harm from 2025 to 2030 under the current business path. Dangerous AI capabilities ranks highest at 21.5%, followed by cyberattacks and weapons at 21%. False information is lowest at 12.8%.

Experts' estimated likelihood of catastrophic harms by AI

Data: MIT IT FutureTech and the University of Queensland; Chart: Herb Scribner/Axios

There is a one-in-five chance of AI gaining dangerous weapons capabilities or causing mass harm that could kill millions in the next five years, per global experts surveyed for a recent MIT study. 

Why it matters: The findings add to the growing debate over AI safety and cybersecurity as governments and companies race to deploy increasingly capable systems.

Last week's news of an OpenAI model breaking containment and breaching the AI platform Hugging Face only adds to the debate about what can go wrong. 

Driving the news: Researchers from MIT and the University of Queensland in Australia asked 272 international experts to evaluate 24 different risks based on their likelihood and severity between 2025 and 2030. 

The experts said 18 of the 24 AI risks had "at least a 10% probability of catastrophic outcomes over the next five years" — but five main risks stood out with higher probabilities.

The study defined a "catastrophic outcome" as an event having more than 1 million human deaths, more than $100 billion in financial loss or generally "civilizational-scale intangible impacts."

The five catastrophic risks if companies and organizations stay on the current course include:

AI possessing dangerous capabilities: Experts say these could potentially cause mass harm through deception, weapons development, cyber offenses and misalignment (21.5%).

Cyberattacks, weapon development or use, and mass harm: Using AI to develop weapons (including chemical or biological), commit cyberattacks or create mass-harm weapons, like nuclear explosives (21%).

Power centralization and unfair distribution of benefits: Limiting which people or groups benefit from AI could cause societal inequality (18%).

Competitive dynamics: AI competition to release the best models leads to error-prone systems (16.6%).

False or misleading information: AI creates misinformation or errors that lead to inaccurate beliefs, leading humans to make poor decisions based on false beliefs (12.8%).

Reality check: The experts said some mitigations could reduce the severity of the AI harms, but the chances of them happening remained above 10% in that scenario.

The big picture: AI safety concerns have continually raised questions about guardrails.

AI behaviors, as well as the opinions about those behaviors, can move markets and reshape conversations overnight — leading to doomsday scenarios.

The other side: AI has driven a productivity explosion, with many in the AI field cheering the new technology's ability to improve productivity and automate tasks.

The bottom line: Researchers say catastrophic AI risks remain uncertain but significant enough that interested parties should treat them as challenges to overcome.

Go deeper: AI is a cybersecurity risk accelerant, experts say

AI is a cybersecurity risk accelerant, experts say

These 5 AI risks have the highest potential for catastrophe

Researchers asked 272 experts to evaluate 24 different risks.

A bar chart that shows experts' estimated likelihood of AI-related catastrophic harm from 2025 to 2030 under the current business path. Dangerous AI capabilities ranks highest at 21.5%, followed by cyberattacks and weapons at 21%. False information is lowest at 12.8%.

Cybersecurity

Emerging Tech

News and analysis of the scientific advances fueling AI and quantum computing, revolutionizing biology and medicine, and tackling climate change. Science is changing the world and colliding with the global politics that shape it.

Science

President Trump's economic sales pitch is colliding with voters' sour moods on high prices and the economy as the 2026 midterms loom.

Why it matters: Economic frustration is giving Democrats an opening on the issue that often decides elections — and could help them erase Republicans' narrow congressional majorities in November.

Trump has previously dismissed economic concerns, assuring voters that prices will come down and that affordability is an issue made up by political rivals to hurt his administration and the GOP. 

But Trump's speech in Michigan is meant to tout the administration's economic policies — though they aren't sitting particularly well with voters. 

What they're saying: "The contrast could not be clearer: the Democrat economic agenda created the worst inflation crisis in a generation under Joe Biden, while President Trump's agenda unleashed historic job, wage, and economic growth during his first term," White House spokesperson Kush Desai told Axios in an emailed statement.

"In his second term, President Trump is again implementing his proven agenda of success, and these policies are again creating more private-sector jobs, lowering costs, and accelerating economic growth." 

Representatives for Biden did not immediately respond to Axios' Monday afternoon request for comment.

By the numbers: Roughly 35% of Americans approve of Trump's handling of the economy, whereas 65% disapprove, per a CBS News/YouGov poll of 2,193 adults conducted July 22-24.

About 29% approve of Trump's handling of inflation, while 71% disapprove.

Only 24% of Americans view the economy as excellent or good under the Trump administration this year, down 8 percentage points from July 2025, when 32% viewed the economy as good, according to a Fox News poll conducted July 17-20.

Zoom in: But the economy remains top of mind for voters, with 29% telling Pew Research Center that they want candidates in their home district to focus more on it than anything else this election cycle.

Notably, neither party has an advantage down ballot on their approach to economic issues. 37% told Pew they most agree with the Democratic Party, while 36% said Republicans.

According to a Fox News poll, 54% feel Democrats would do better with the economy compared to 45% who felt the same about Republicans. 

What we're watching: Who has the winning message for voters come November. 

Currently, Democrats have an 11-point advantage (68% to 57%) over Republicans regarding enthusiasm for voters to go to the polls, followed by Independents at 41%. 

Independent voters will remain a key voting bloc and are essential to win over for whichever party ultimately controls Congress beginning next year. 

Go deeper: Trump's economic polling is in freefall

Editor's note: This story has been updated with comment from the White House.

Trump tries to sell an economy voters aren't buying

Economic frustration is giving Democrats an opening on the issue that often decides elections.

Photo illustration of President Donald Trump dragging a giant dollar sign

Photo illustration: Sarah Grillo/Axios. Photo: Samuel Corum/Politico/Bloomberg via Getty Images

Economy, finance & markets

Inflation

2028

Axios 2028

What Axios' Alex Thompson is hearing from Democratic insiders about the party's most likely 2028 Democratic nominees, as told to Jim VandeHei for his weekly Axios C-Suite newsletter:

1. Kamala Harris. She is far ahead of every other contender with Black voters, still the most important voting bloc in a Democratic primary. Her allies argue that no one else is as prepared for a national campaign. She was a better candidate in 2024 than in 2020 and is working hard to be a better, more authentic, less cautious candidate in 2028. Harris is likely a beneficiary of Democrats' preliminary choice yesterday of South Carolina, instead of Nevada, for the first Democratic presidential primary of 2028.

2. AOC. No one else can plausibly claim to be Bernie Sanders' rightful heir, and she channels where the energy of the party is right now. If Bernie endorses her on Day 1, she will raise $100 million without talking to a single donor. The question isn't whether she'd be a top contender, but rather whether she decides to run for Senate instead.

3. Gavin Newsom. He's the best political athlete in the field who can stand apart in the debates. He can convincingly argue that he's done more than any other Democrat to push back against President Trump at a time when Democrats feel powerless. With his longtime connections in Silicon Valley and non-doomer views, he'll also have access to deep pockets — but that California baggage is heavy.

4. TBD center-left candidate. Big business, the party establishment and some voters are desperate for a more moderate choice. They'll have many options, including Pennsylvania Gov. Josh Shapiro, Sen. Mark Kelly of Arizona, Rahm Emanuel, Maryland Gov. Wes Moore and Kentucky Gov. Andy Beshear. At a time of populist anger, it's unclear how big this lane is — and if it's big enough for more than one candidate. Right now, it feels like an establishment fantasy.

📈 If you're a CEO or on a CEO's team: Ask to join Jim's new weekly Axios C-Suite newsletter.

2028 Democratic power rankings, right now

Photos: Chip Somodevilla, Lars Niki, and Gonzalo Marroquin/G

Kamala Harris

The Federal Reserve typically telegraphs its interest rate moves in advance, then follows through. This week will provide the clearest evidence yet on whether chairman Kevin Warsh is ending the era of the no-surprises Fed.

The big picture: Markets are now putting meaningful odds on the Fed delivering an interest rate hike at the conclusion of its two-day meeting this week.

If the Federal Open Market Committee were to do so, it would suggest a new era in which the central bank is less predictable — accepting more volatility and surprise as the price to be paid for greater policy nimbleness.

State of play: In the final public communications before the Fed entered its pre-meeting blackout period, signs were pointing to the FOMC leaving rates unchanged at this meeting, but holding out the possibility of a future rate hike if inflation doesn't move down.

The "no surprises" Fed is in doubt

Some episodes from the last couple of decades show the trade-offs involved when the Federal Reserve surprises markets.

Axios

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