Why Is Iran Acting Like It Is Holding All the Cards in Hormuz Talks?

Good morning. On Tuesday morning, Treasury Secretary Scott Bessent went on CNBC to say that a deal could be announced later that day to reopen the Strait of Hormuz. The stock market jumped markedly.

Alas, there was no deal. Far from it.

And on Saturday, Mohammad Bagher Zolghadr, secretary of Iran’s Supreme National Security Council, laid out the conditions for reopening the Strait. They include the U.S. permanently ending the war, lifting its naval blockade, withdrawing forces, ending all sanctions, freeing Iran’s frozen assets, the payment of war reparations and ending threats and insults, among other things.

“It shows that they believe they have the upper hand, they believe they’re winning, and they are emboldened,” former Defense Secretary Mark Esper said Sunday on ABC’s “This Week” program.

President Trump in February 2025 famously told Ukraine’s leader, Volodymyr Zelensky, that he didn’t “have the cards” in talks with Russia.

Trump often looks at negotiations in the frame of a power dynamic: Who has the cards? Who has the leverage?

The U.S. and Israeli militaries have pounded Iran hard for more than five months, destroying much of its military and killing numerous top leaders. Iran is using the Strait of Hormuz as its final point of leverage.

This is somehow proving effective, because there isn’t an easy way to replace this waterway in terms of global trade in the Middle East. Just a few missiles and drones can create a lot of havoc in that waterway. And Iran knows the U.S. has been reticent to send in ground troops to clear out the Strait of Hormuz (not to mention the continuing questions about how many missiles the U.S. military has available).

Trump must decide whether to relaunch military strikes, wait them out or try to negotiate.

White House counsel: Trump said Will Scharf will become the new White House counsel in September, taking the position ahead of the midterm elections and potential congressional investigations.

Trump’s Monday: The president is to take part in a swearing-in ceremony for Attorney General Todd Blanche at 2 p.m. He is also to participate in an interview at 9:30 a.m. and a policy meeting at 12:30 p.m., to sign an executive order at 2:45 p.m. and to participate in tele-rallies at 6:30 p.m. and 7 p.m.

Republicans need to win over voters on the economy. With voters’ negative impressions now hardening, some Republican and independent analysts say Trump and his GOP allies have little time to regain a key asset: their image as the party better suited to handle the economy. For the GOP, the fear is that voters who backed the party in 2024 believing Trump would ease the cost of living will stay home or defect this November. “The set of events that would need to happen to produce a real change in the Republican Party’s fortune is pretty big,” said John Sides, a political scientist at Vanderbilt University.

Benjamin Netanyahu made a rare break with Trump on Gaza. The Israeli prime minister’s rejection of Trump’s peace plan for Gaza is a rare public break with the U.S. leader, who had hailed “a historic agreement” to disarm Hamas. The plan calls for the militant group to lay down arms in tandem with the gradual withdrawal of Israeli troops from the enclave, which the Israeli leader said Sunday couldn’t happen until Hamas was fully disarmed. Netanyahu’s decision risks angering Trump, with whom he has had fractious relations behind the scenes for months,

Joe Biden’s cancer is “painful and it’s very debilitating,” said son Hunter. The former president’s cancer has spread to “his bones and further,” according to Hunter Biden. “It’s very painful and it’s very debilitating in many respects,” he said during an interview with the BBC that aired Friday. “But he’s still out there.” The elder Biden, 83, is preparing to release a book and trying to find his footing in his postpresidency. He recently announced that he plans to release a memoir about his presidency in November, shortly after the 2026 midterms.

I’m Damian Paletta, The Wall Street Journal’s Washington coverage chief. I’ve covered Washington for 22 years as a reporter and editor. I’ve covered the White House, Congress, national security, the federal budget, economics and multiple market meltdowns.WSJ Politics brings you an expert guide to what’s driving D.C., every weekday morning. Send your feedback to politics@wsj.com (if you’re reading this in your inbox, you can just hit reply). This edition was curated and edited in collaboration with Joe Erwin and Michael Connolly. Got a tip for us? Here’s how to submit.