3 min readSep 1, 2026 06:05 AM IST First published on: Sep 1, 2026 at 06:05 AM ISTThe US and Iran trading strikes for the first time in more than a month has brought the spotlight back on the military dimension in a conflict that had acquired an increasingly economic character. The US said its forces on Sunday attacked two Iranian rocket launchers that were preparing to deploy sea mines in the Strait of Hormuz, prompting an Iranian counterattack on American fighter jets at air bases in Jordan. The exchange comes as gasoline prices in the US rose again in August, while Iranian President Masoud Pezeshkian acknowledged the economic pain being caused by US sanctions. The conflict’s economic and military fronts remain closely intertwined, but neither side appears willing to call a halt to the hostilities.Washington’s resolve is evident in Treasury Secretary Scott Bessent’s threat to unleash an “economic D-Day” to force Iran back to the table. Besides sanctioning dozens of Iran-linked entities, the US has said it could also target any country, company or bank that trades with Tehran. That is easier said than done. Iran has been hit by multiple layers of sanctions for years and has periodically adapted to withstand them. As for going after countries that trade with Iran, the problem is China. Beijing buys up to 90 per cent of Iran’s oil and has threatened to retaliate if Chinese companies are included in Bessent’s secondary sanctions. With US President Donald Trump and Chinese President Xi Jinping due to meet in Washington in the second half of September for trade negotiations, it is unlikely that Washington will risk antagonising Beijing, which has significant leverage of its own over critical minerals and manufacturing supply chains. Iran, or at least its civilian leadership, is also seeking a way out. Pezeshkian has repeatedly called for peace and went a step further over the weekend by saying that the June 17 MoU is in Tehran’s interests. How far he will be allowed to pursue such an approach will depend on the hardline IRGC, which opposes major concessions and views compromise as weakness.AdvertisementUltimately, all roads lead to Hormuz. Until there is a durable agreement on how to manage the waterway, there will be sporadic military attacks and renewed threats of economic escalation. The latest exchange makes clear that neither side is ready to forgo the military option.