Why Trump Rejected Iran's Proposal To End War And Reopen Strait Of Hormuz

U.S. President Donald Trump has rejected Iran's latest proposal to end the war and reopen the Strait of Hormuz, with experts saying the President believes Washington can secure better terms by sustaining economic pressure on Tehran.

"I reject their proposal," Trump told reporters on Saturday, arguing that Iran wants a deal because it is "losing so badly."

"They want to make a deal, and I think that's fine. I'd like to make a deal too. But that deal would not be acceptable," he said.

On Sunday, Iranian Foreign Minister Abbas Araghchi said Tehran had seen Trump's initial reaction but was yet to receive a formal response through mediators. Qatar has been mediating talks between Iran and the U.S. on the sidelines of the United Nations General Assembly in New York.

Iran's seven-day roadmap proposed that Washington lift its naval blockade of Iranian ports, waive sanctions on Iranian oil sales, release an estimated $12 billion in frozen Iranian assets, and observe a wider regional ceasefire including in Lebanon and Yemen.

In return, Iran would reopen the Strait of Hormuz and begin negotiations with Washington on a final agreement.

The proposal is similar to a June Memorandum of Understanding (MoU) signed by both sides, which collapsed last month over disagreements on terms, leading to escalated attacks in and around the Strait of Hormuz, which remains under Iranian blockade.

Experts say both sides remain far apart on who should make the first concessions.

"Trump's calculation looks fairly straightforward. He believes the combination of the naval blockade and economic isolation is finally squeezing Iran hard enough that Tehran's latest proposal is evidence of weakness rather than an offer Washington needs to seize," Andreas Krieg, associate professor at King's College London, told Al Jazeera.

He said Trump's public argument that Iran is "losing badly" suggests he thinks time is improving Washington's bargaining position.

A key part of that calculation is the belief that economic pressure has not yet peaked. The Trump administration has tightened its naval blockade and imposed new sanctions targeting Iranian oil revenues, with threats of secondary sanctions on countries doing business with Tehran. Last week, the U.S. imposed aviation sanctions on Iran, weeks after Treasury Secretary Scott Bessent announced a global economic pressure campaign.

Richard Weitz, senior fellow at the NATO Defence College, said the White House may believe it can "wait a bit and get better terms," noting Washington's concern about Iran's proposed sequencing of concessions.

He recalled that similar pressure led to the 2015 Iran nuclear deal when Tehran agreed to concessions in exchange for sanctions relief.

However, experts warned that waiting carries political risks for Trump ahead of November's midterm elections. A late August Reuters/Ipsos poll showed 63 percent of Americans oppose the U.S.-Israel war on Iran while 31 percent support it. Rising fuel costs linked to the Hormuz closure could fuel cost-of-living concerns.

"The gamble is that time cuts both ways," Krieg said. "With the midterms approaching, Trump does not want to appear to lift the blockade, waive oil sanctions and release Iranian assets simply to regain access to a waterway that Iran itself disrupted. But every additional week also means elevated energy prices, continued military exposure and mounting pressure on Gulf partners."

Mohamad Elmasry of the Doha Institute for Graduate Studies said Iran's proposal could be seen as "throwing a bone to Trump" by offering a route to lower oil and gas prices before the vote, but Tehran could also choose to make him "pay" for rejecting it by escalating as midterms approach.

"The Republican Party is not doing well in the polls. It's not just the Iranians under severe economic pressure because of the U.S. naval blockade and ongoing sanctions, it's also the Trump administration," Elmasry said.

Krieg warned that confusing economic pain with willingness to capitulate is dangerous, noting Iran could increase costs through Hormuz, regional infrastructure, and potentially Bab al-Mandeb — a strategic chokepoint where Iran-aligned Houthis have expanded control and declared a blockade on Saudi ships in the Red Sea.

Ross Harrison of the Middle East Institute said Tehran may now see the risk of escalation as less costly than premature compromise, especially after Washington's rejection.

In an interview aired Saturday, Iranian President Masoud Pezeshkian said Iran no longer trusts talks with Washington after attacks during previous negotiations.

Negar Mortazavi, senior fellow at the Center for International Policy, said Iran is sending a "double message – diplomacy or defiance," and that Trump's rejection will harden Tehran's stance rather than extract more concessions.

"Iran's economy is under enormous pressure, but Tehran will not necessarily accept demands it considers fundamental red lines," she said, referring to the nuclear programme.

Analysts said Tehran understands Trump wants an exit he can present as victory and is betting on time.

"Iran is betting heavily on time. Its strategy is to keep the pressure high enough that he eventually comes back to negotiations while making that exit progressively more expensive," Krieg said.

"Both sides need a deal, but both currently think waiting will improve the deal they eventually get," he added, describing protraction as the most likely outcome.