As Washington and Tehran trade messages in search of yet another cease-fire, the Trump administration must revisit the faulty assumptions that got it stuck in a costly war in the first place. The administration has repeatedly fallen prey to the sunk cost fallacy. In the face of this strategic failure, President Donald Trump has mostly acted as if the problem were one of scale or duration. In reality, U.S. negotiating leverage has diminished as the war has progressed and will likely continue to erode as the United States exhausts its munitions and domestic political consequences mount. New Houthi attacks on Saudi oil exports add precarity to a war that has already induced global economic shocks, damaged U.S. credibility, and put America’s regional allies in the middle of a conflict they advocated against.

Yet even as Tehran’s position hardens, a protracted war is not good for Iran either. The regime has benefited politically by casting itself as the victim of U.S. and Israeli aggression, but Iran was facing existential political and economic challenges before the conflict began. Every day the war drags on, and every bridge or business that warplanes destroy, only lengthens the road to a potential recovery for the regime. But to end the war, Iranian leaders need to believe that recovery is possible.

As Washington and Tehran trade messages in search of yet another cease-fire, the Trump administration must revisit the faulty assumptions that got it stuck in a costly war in the first place. The administration has repeatedly fallen prey to the sunk cost fallacy. In the face of this strategic failure, President Donald Trump has mostly acted as if the problem were one of scale or duration. In reality, U.S. negotiating leverage has diminished as the war has progressed and will likely continue to erode as the United States exhausts its munitions and domestic political consequences mount. New Houthi attacks on Saudi oil exports add precarity to a war that has already induced global economic shocks, damaged U.S. credibility, and put America’s regional allies in the middle of a conflict they advocated against.

Yet even as Tehran’s position hardens, a protracted war is not good for Iran either. The regime has benefited politically by casting itself as the victim of U.S. and Israeli aggression, but Iran was facing existential political and economic challenges before the conflict began. Every day the war drags on, and every bridge or business that warplanes destroy, only lengthens the road to a potential recovery for the regime. But to end the war, Iranian leaders need to believe that recovery is possible.

There are certainly powerful entities in Iran that favor continuing the war. But the majority of Iran’s leading decision-makers supported the June memorandum of understanding and comprehend that a war cannot continue indefinitely. Ultimately, both sides should have strong motivations for ending the war, and despite the bleak outlook, the United States still has opportunities to exit in a way that could strengthen its long-term standing in the region. But this requires more than inking a quick-win deal to bring down gas prices before the U.S. midterm elections. The administration must craft a more durable agreement on the Strait of Hormuz that avoids dangerous precedents for freedom of navigation. Such a deal will require significant near-term inducements to Iran. But if combined with a broader strategy that includes shoring up the resilience of Arab Gulf partners and rebuilding a consensus around Iran policy with key U.S. allies, the United States can achieve the more comprehensive diplomatic solution Trump is seeking.

A photo obtained from the Iranian news agency Tasnim shows an Islamic Revolutionary Guard Corps boat allegedly taking part in an operation to seize ships attempting to cross the Strait of Hormuz on April 21. Meysam Mirzadeh/AFP via Getty Images

There is a myth in Washington that pressure alone can break Iran. For nearly five decades, the United States has used every form of military, economic, and political pressure available to try to bend Iran to its will. It has not worked. Pressure has occasionally shaped Iranian decision-making but only when paired with other tools, such as inducements, coalitions, mutual respect, and patience. If Trump continues to believe Iran will simply surrender to U.S. power, he will fail.

The MOU between the United States and Iran........

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