The upcoming arsenal of sanctions
TRUMP’S FORTUNE TELLER PROMISES IRAQIS “DAYS THEY HAVE NEVER SEEN BEFORE,” AND THE FACTIONS RESPOND FROM PARLIAMENT: “WELCOME TO DEATH!”
As the Iraqi parliament held its first session, electing a deputy speaker affiliated with the factions, Washington was simultaneously outlining an unprecedented punitive strategy. Former Trump advisor Gabriel Souma, described as an “expert on the inner workings of the White House and Trump’s policies,” went so far as to warn of a potential moment when Iraqis might find themselves buying the equivalent of one dollar for “five bags” of Iraqi dinars. Between this catastrophic scenario and a parliament where a member of Kataib Hezbollah declared his “loyalty to the Popular Mobilization Forces” and vowed to pass the PMF law despite Washington’s opposition, Iraq appears to be heading toward a difficult test: an economy beholden to the dollar and a legislative body openly defying American demands.
Gabriel Souma: The prophecy of sanctions and the potential “night of collapse”
Gabriel Souma is not merely a political commentator; he has long been presented as a professor of international law and an expert on Middle Eastern affairs. He served on President Donald Trump’s advisory team during the previous term and participated in sensitive discussions concerning the legality of US strikes in Iraq and Iran, as well as Washington’s financial and punitive policies in the region. When he speaks today in such definitive terms about “unprecedented measures” that Iraq will face if Mark Savaya fails to implement Trump’s demands in Baghdad, he is reflecting the prevailing mood within the president’s inner circle more than offering a cold, academic analysis.
When Souma says that Savaya “represents Trump 100%, and 99% is unacceptable,” he is outlining the limits of his mandate: a special envoy with no room to maneuver outside the rigid script, at a time when the White House is brandishing options ranging from strangling dollar channels through the Federal Reserve, to broader restrictions on the banking and energy sectors, culminating in a near-siege if Baghdad decides to fully align itself with the factions. This posturing is consistent with the general trajectory of Trump’s current strategy toward Iraq and Iran, which relies on escalating sanctions and financial pressure rather than large-scale military engagement, while using the threat of cutting aid and reconsidering oil waivers as a continuous bargaining chip.
In this context, the image of “Iraqis buying one dollar for five bags of Iraqi currency” is not so much a literal economic prediction as it is a crude metaphor for the possibility of an exchange rate spiral out of control and a collapse in purchasing power, if Washington decides to use its entire arsenal of financial pressure all at once against a country that depends almost entirely on the dollar to finance its trade and banking system.
Mark Savaya: Envoy of the tough deal between the White House and Baghdad
Mark Savaya himself is not a traditional diplomat. An Iraqi-American businessman of Chaldean descent, he rose from the retail and medical cannabis industries in Michigan to become Trump’s special envoy to Iraq in October 2015, a move widely interpreted as a shift by the president toward “deal-making diplomacy” rather than classical diplomatic hierarchy. His writings and public pronouncements reveal a clear inclination to use economic and financial tools to reshape the relationship with Baghdad: encouraging investment and infrastructure development on the one hand, and linking any concessions or exemptions to Iraq’s commitment to curbing the influence of Iran and its armed factions on the other.
From this perspective, Savaya becomes a dangerous link: if he succeeds in persuading Iraqi political forces—especially the Shia ones—to accept a “settlement” that subjects the factions to state authority and freezes any move to legally enshrine them as a parallel power, the specter of maximum sanctions may recede. However, if he fails, as Souma warns, the very mandate he carries from Trump could easily be transformed into an indictment against Baghdad before the American sanctions machine.
A parliament with a declared populist bias… when the logic of defiance prevails
In contrast, the factional forces are acting as if they are seizing a moment of power within the new parliament. The election of a first deputy speaker from one of the Shiite armed groups, classified by the US as an “Iranian-backed group,” has raised clear concerns in Western analyses, which saw this move as a message that the Baghdad legislature is leaning more towards the Popular Mobilization Forces camp, at a time when US pressure is mounting on the issue of the Popular Mobilization Forces and its laws.
At the heart of this mood comes the statement by MP Hussein Mounes, leader of the “Rights” movement, which is close to Kataib Hezbollah, who frankly declared that “Parliament is biased towards the Popular Mobilization Forces” (PMF), and that the PMF law will be passed this time despite American reservations. This is a reference to the law that Washington sought to obstruct in the previous parliamentary session through direct pressure on the Prime Minister and the leaders of influential Shiite blocs. Hussein Mounes himself is not an ordinary name; he has been presented for years as the political face of Kataib Hezbollah and a contender within the Shiite political establishment for the representation of a “resistance” that sees its full institutional integration within the state as a guarantee for the continuation of its armed-political project.
The most vehement pronouncements come from within other alliances close to the factions, where Badr Organization MP Abu Turab al-Tamimi declares, “We are not concerned with pressure. We are 90 MPs, and we don’t care about America or what it wants. If it threatens us with death, then so be it.” This rhetoric, with its defiant tone, expresses a firm conviction among a segment of the political class that any retreat on the issue of the Popular Mobilization Forces (PMF) would constitute a strategic concession to both Washington and Tehran, weakening these forces’ ability to assert their share in both the state and the economy.
The crowd control law: between Marco Rubio’s message and the new “pass promise”
The clash over the Popular Mobilization Forces (PMF) law is not new, but its current level is different. When the draft “Law on Service and Retirement for the Mujahideen of the Popular Mobilization Forces” was introduced in 2025, along with subsequent proposals to regulate the PMF, the issue became one of the most sensitive between Baghdad and Washington. Leaked US messages and phone calls revealed direct warnings from Secretary of State and National Security Advisor Marco Rubio to Prime Minister Mohammed Shia al-Sudani, stating that passing the law would be interpreted in Washington as “formally enshrining the influence of Iran and its factions” within the state structure, with the threat of sanctions targeting the energy and security sectors and potentially a review of military and financial aid.
Under this pressure, and with internal division even within the Shiite bloc regarding the timing and form of the law, the government withdrew the draft from the parliament’s agenda at the end of the summer of 2025, after weeks of postponed sessions and sharp disagreements, in a scene that looked like at least a tactical American victory, and a postponement of the final clash rather than a real settlement.
Today, when a member of parliament close to Kataib Hezbollah declares that parliament, given its current leanings, “will pass the Popular Mobilization Forces (PMF) law,” he is effectively pledging to reopen the same issue, but from a position of numerical strength within parliament and with political momentum stemming from the election of a new president and a shift in the balance of power within Shia alliances. This pledge is not interpreted in Washington as a technical legal dispute, but rather as a direct test of the seriousness of Trump and his team’s threats, just as it leaves his envoy, Savaya, a narrow margin for negotiation before these “pressure tactics” become a reality.
The potential dollar war: from the weapon of sanctions to the nightmare of the street
What Soma is threatening in terms of “unprecedented measures” does not come out of thin air. Over the past few months, Washington has sent more than one indication of its readiness to use the economic weapon gradually and extensively against Iraq: issuing warnings about mixing Iranian funds with the Iraqi financial cycle, talking about a series of escalating sanctions on factions, figures and banks under the umbrella of a new presidential memorandum, and threatening to restrict Iraq’s access to the dollar if it continues to harbor groups that Washington classifies as “terrorist organizations” or “arms of the Revolutionary Guard”.
In a worst-case scenario, one can imagine a package of measures beginning with tightening restrictions on the currency auction and correspondent banking transfers, moving through the inclusion of new Iraqi banks on sanctions lists, and culminating in reducing exemptions for importing gas and electricity from Iran, and perhaps even reopening the file on “partial sanctions” on specific sectors—a modified version of the 1990s experience, but with more precise and less publicized financial tools. In such a scenario, the image of “five bags of Iraqi dinars for one dollar” becomes an exaggerated expression of a possible reality: a sharp collapse in the value of the dinar, inflation that devours salaries, and a middle class that vanishes within a few months.
Conversely, the Popular Mobilization Forces and their allies are betting that Washington cannot go so far as to impose a complete blockade, because Iraq remains essential to global energy markets and regional stability, and any total collapse would create a vacuum that would be exploited by powers rivaling the United States, from Iran to China and Russia. However, this bet, while containing a degree of geopolitical realism, overlooks the fact that what the Trump administration is currently threatening are sanctions “broad enough to discipline Baghdad, without reaching the point of its complete collapse”—a level that alone would be sufficient to cause an unprecedented social and economic shock in a country that has barely emerged from the currency crises of recent years.
From the slogan “Welcome to death” to the question: Who pays the price?
In the end, the scene as it appears today looks like a race towards the brink. A Trump advisor is waving before the Iraqis the image of an economy collapsing overnight if the factions are not disarmed according to American conditions, a special envoy has a full mandate to conclude a harsh “deal” with Baghdad, a new parliament whose leaders boast that their “inclination is towards the Popular Mobilization Forces” and that they are ready to pass the Popular Mobilization Forces law defying Washington’s pressure, and a deputy sums up the mood with a speech: “We don’t care about America… If they threaten us with death, then welcome death.”
Amid these slogans and threats, the voice of the only party that has no real choice is absent: the Iraqi citizen who will wake up, in the worst-case scenario, to eroding salaries, collapsing purchasing power, a frozen labor market, a country caught between Washington and Tehran, and a parliament negotiating the future of weapons while the currency plummets.
The question that arises here is not only: Will Trump really dare to push Iraq to the brink of economic collapse if Parliament deliberately enshrines the Popular Mobilization Forces by force of law? But also: Do the “Popular Mobilization Forces” within the Parliament realize that their bet on challenging Washington to the end may make the slogan “Welcome to death” approach people’s daily lives, not as a choice of resistance, but as a reality of poverty, deprivation, and a dead end?
At a moment like this, it seems that Iraq is indeed standing on a sharp dividing line between the “dollar war” and the “war of laws,” where a single signature in the White House, or a single vote under the dome of Parliament, may determine the course that the coming years will take: a difficult and painful path of settlement, or an open path of confrontation, the price of which will be paid first and foremost by the Iraqi street.
