Protests Over Economic Collapse Roil Iran as Trump Threatens Intervention, Raisi Government Struggles to Contain Currency Crisis
Iran is once again at the brink. Six days into the largest protests the country has witnessed since 2022, the Islamic Republic finds itself in a precarious domestic and geopolitical bind—grappling with mass unrest triggered by the freefall of its national currency and inflamed by a public still raw from last summer’s U.S. airstrikes on nuclear sites.
The volatility is now deepening into a full-blown crisis, marked by the return of U.S. President Donald Trump to a confrontational posture and a defiant volley of warnings from Tehran’s security establishment.
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| File Photo: Secretary of Iran's Supreme National Security Council Ali Larijani; Via: TheCradleMedia |
The movement has now spread to key cities including Isfahan, Shiraz, and Mashhad, with security forces deploying tear gas in several neighborhoods to disperse demonstrators. While still localized and not yet fully national in scale, the protests are unmistakably resonant of the 2022 Mahsa Amini movement—again fusing economic grievances with deeper frustrations toward Iran’s theocratic power structure.
The government led by reformist President Masoud Pezeshkian has struck a conciliatory tone, expressing willingness to engage with protesters. But Pezeshkian himself has acknowledged that the financial and political tools at his disposal are limited.
Iran’s economic deterioration—exacerbated by sanctions, international isolation, and domestic mismanagement—has undermined the administration’s credibility. For many Iranians, the rial’s collapse is not just an economic indicator, but a barometer of state failure.
The timing of the unrest—just months after the United States carried out airstrikes on Iranian nuclear facilities in June—has added a combustible geopolitical layer.
Iran responded at the time by attacking the U.S.-operated Al Udeid Air Base in Qatar, a rare direct strike against American regional assets. Though escalation was narrowly avoided, tensions have simmered ever since.
On New Year's weekend, President Trump reignited that powder keg. In a post on his Truth Social platform, he warned Iran against “violently killing peaceful protesters,” adding that the U.S. was “locked and loaded and ready to go.”
The language, echoing Trump’s 2019 messaging during previous Iran crises, was quickly read in Tehran as a signal of potential re-engagement—either militarily or via covert operations.
Iran’s response was swift. Ali Larijani, secretary of the Supreme National Security Council, alleged without evidence that the U.S. and Israel were stoking unrest. His statement on X, a platform officially banned in Iran but widely used via VPNs, warned that American intervention would “correspond to chaos in the entire region.”
Invoking the U.S. military presence across West Asia, Larijani declared that “Trump began the adventurism,” and warned that U.S. soldiers could be targeted. His remarks were echoed by Ali Shamkhani, a senior adviser to Supreme Leader Ayatollah Khamenei, who described any foreign “interventionist hand” as one that would be “cut.”
Both men’s statements reflect not only Iran’s official posture of defiance, but also the internal contradictions now straining the Islamic Republic. While hardline factions warn of outside interference, there is growing acknowledgment—albeit tacit—that public anger is driven by systemic domestic failures.
The fact that demonstrations erupted in the commercial heart of Tehran, led by traders and shopkeepers long considered the backbone of the Islamic Republic, points to a deeper legitimacy crisis.
It is also notable that the protests come as Iran has signaled a partial nuclear de-escalation. Following last summer’s military confrontation, Tehran announced it had ceased uranium enrichment at all known facilities, a gesture widely interpreted as an attempt to re-open stalled negotiations with the West.
However, diplomatic overtures have yet to yield concrete engagement, as both Trump and Israeli Prime Minister Benjamin Netanyahu have issued stern warnings against any resumption of Iran’s nuclear activity.
Against this backdrop, the street-level mobilization represents not only a socio-economic revolt, but a strategic vulnerability. The memory of Mahsa Amini’s death in custody—an event that galvanized a rare coalition of youth, women, and labor across Iran—remains fresh.
While the present protests have yet to reach that scale or intensity, the triggers are no less volatile: currency collapse, deteriorating living standards, and a public perception that reformist gestures are cosmetic at best.
What makes the moment particularly fraught is the uncertainty of external response. Trump’s threats, while characteristically blunt, lack clarity on operational consequences. U.S. military engagement in the region remains high, and the shadow war between Israel and Iran continues through cyberattacks, drone strikes, and sabotage.
Whether the U.S. would actually intervene to “rescue” protesters—as Trump suggested—is far from assured, but the signal alone risks triggering escalation between regional actors.
Meanwhile, Iran’s messaging machine is working to frame the unrest as externally instigated. That narrative, while effective in consolidating loyalist sentiment, may do little to defuse the core economic and political grievances driving the protests.
The resignation of the central bank head, combined with accelerating inflation and limited foreign reserves, suggests the regime’s economic levers are increasingly ineffective.
The intersection of economic desperation, domestic protest, and external military threat marks a critical juncture. The state’s ability to contain unrest through force or diplomacy is uncertain, and much will depend on whether the protests remain fragmented or crystallize into a broader opposition movement.
In the absence of meaningful economic relief or political reform, the risk of prolonged instability remains high.
While Iran's leadership continues to invoke sovereignty, resistance, and national dignity, the message from the streets—and increasingly, from within its own economic centers—is one of disillusionment.
For a government that has long positioned itself as resilient in the face of global pressure, the challenge now lies not only in confronting external threats, but in restoring internal coherence.