WASHINGTON, July 9 — The ongoing negotiations between the United States and Iran are beginning to look like a replay of the Trump administration’s trade war with China, according to a prominent economist who watched both dramas unfold. Gary Hufbauer of the Peterson Institute for International Economics has drawn a direct line between the two sets of talks. He describes them as “eerily similar,” pointing to a pattern of maximalist demands, shifting deadlines, and a notable absence of clear diplomatic off-ramps.
For anyone who followed the Trump-era China talks from 2018 to 2020, the comparison hits close to home. Here’s what it means, in plain terms: the U.S. is once again engaged in high-stakes brinkmanship, this time over Iran’s nuclear program, and the playbook looks familiar.
Think of it like a high-pressure chess game where one player keeps moving the goalposts and the other side is left guessing what a win actually looks like. The current talks are indirect, with Oman and Qatar serving as mediators since April 2025. They follow the collapse of the 2015 Joint Comprehensive Plan of Action, or JCPOA, which the U.S. withdrew from in May 2018 under President Trump.
Since then, Iran’s nuclear program has advanced significantly. According to the International Atomic Energy Agency, as of May 2025, Iran’s enriched uranium stockpile sits at over 6,000 kilograms, with enrichment levels reaching up to 60% purity.
That’s a sharp escalation from what the JCPOA had originally capped. The practical upshot: Iran is now much closer to weapons-grade material than it was when the deal was in place. The U.S. has responded with multiple rounds of sanctions since 2018, with additional measures announced in March 2025 specifically targeting Iranian oil exports.
The strategy is to squeeze Iran’s economy, but Hufbauer warns the pressure could backfire in a very concrete way for American consumers. If the talks fail, he estimates oil prices could spike by $10 to $15 per barrel from current levels, which were around $85 per barrel in May 2025. That could push prices to $100 per barrel.
For context, the average U.S. gasoline price in April 2025 was $3.50 per gallon. An oil price jump of that magnitude would almost certainly mean higher prices at the pump.
The parallel to the China trade talks is instructive. During the Trump administration’s first term, tariffs were imposed on over $350 billion in Chinese goods. A Phase One deal was signed in January 2020, but it did not resolve the underlying structural issues.
Hufbauer sees the same dynamic at play now: a negotiation style that prioritizes pressure over a clear path to resolution, with high economic stakes for both sides. The broader concern is that a failure in the Iran talks could feed into global inflation.
Oil price increases tend to ripple through the economy, raising costs for transportation, manufacturing, and ultimately consumer goods. The U.S. is already navigating a complex inflation picture, and a new spike in energy costs would add to the pressure. For ordinary readers, the so-what is straightforward.
The negotiations are not just a diplomatic game happening in faraway capitals. They have a direct line to household budgets, from the price of filling up the car to the cost of goods shipped by truck and plane. The Trump-era China talks showed that trade disputes can have long-lasting economic consequences, and the Iran talks appear to be following a similar script.
What to watch next: whether the U.S. and Iran can find a way to avoid the economic fallout. The stakes are high, and the clock is ticking.
If the pattern holds, the next few months will be critical in determining whether the talks produce a deal or a crisis.
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