In President Trump’s view, the war that began on February 28 was expected to coerce Iran into accepting his terms. Yet the war has produced something more complex and more consequential. Before the war, Washington approached negotiations with Tehran from a position of clear superiority, combining overwhelming military capability with a credible capacity to calibrate escalation.

However, despite the heavy damage it has sustained, Iran may now be negotiating from a position of greater leverage in the wake of U.S. President Donald Trump’s ceasefire declaration in the early hours of April 8. Over the course of war, Tehran has managed to raise the price of victory for Washington by expanding the scope of the conflict, increasing its systemic costs, and signalling both a capacity to escalate and a willingness to endure sustained pain. The war, therefore, did not invert the balance of power; rather, it transformed the terms on which power is exercised.

Prior to the war, the asymmetry between the United States and Iran was stark and structurally stable. Washington retained escalation dominance. It could strike with greater precision, broader reach, and lower operational risk. Iran, by contrast, operated within a framework of “strategic patience,” avoiding direct confrontation with the US. Under such conditions, negotiations favored the United States. Pressure could be intensified without triggering uncontrollable escalation, and diplomacy could be framed as a concession extracted from a constrained adversary.

The war disrupted this equilibrium not by equalizing capabilities but by revealing thresholds. The scale and geographic scope of the US and Israeli strikes demonstrated the extent of their military reach, targeting critical nodes of Iran’s security architecture. Yet the war also revealed something equally important: Iran’s willingness to absorb significant damage without capitulating, and its capacity to respond beyond the immediate theater of confrontation. Retaliatory actions and cross-domain signaling covering regional, maritime, and economic realm made clear that escalation is not a linear ladder but a multidimensional space.

This shift has redefined the logic of negotiation between the two sides. The central question is no longer which side can inflict greater damage, but which can better manage, sustain, and weaponize escalation risks. In this respect, the war has altered bargaining dynamics in several important ways.

First, escalation has become geographically diffuse. Before the war, escalation scenarios were largely confined to direct or proximate military exchanges. Now, the potential battlespace extends to critical economic arteries particularly energy flows through the Gulf and maritime transit routes such as the Strait of Hormuz. Iran has long possessed the capability to threaten these domains. What remained in question was its willingness to act. The war has now clarified that uncertainty, enhancing the credibility of its readiness to operationalize such threats. Escalation is therefore no longer defined solely by intensity, but by scope. Expanding the geography of risk complicates US planning and raises the systemic costs of continued confrontation.

Second, the war has sharpened asymmetries in cost imposition. U.S. and Israeli operations rely on technologically advanced and financially costly systems designed for precision and dominance. Iran, by contrast, has demonstrated an ability to impose sustained pressure through comparatively inexpensive means: drones, missile salvos, and disruption tactics targeting infrastructure and economic flows. This creates a dynamic in which maintaining superiority is costly, while contesting it remains relatively affordable. Over time, such asymmetries can translate into bargaining leverage, particularly as the costs of defense and stabilization begin to outweigh the benefits of continued coercion.

Third, the war has reframed expectations about duration and endurance. Classical bargaining theory suggests that wars and the negotiations that follow are shaped not only by capabilities but also by perceptions of resolve and tolerance for prolonged confrontation. Iran’s ability to withstand significant strikes without systemic collapse signals a higher tolerance for sustained war than previously assumed. For the United States and its partners, the calculus differs. Prolonged instability carries broader consequences: volatility in global energy markets, risks to regional infrastructure, and mounting political pressures at home and among allies. If one side appears more capable of enduring escalation’s consequences, it may gain leverage even while absorbing greater immediate damage.

The question of endurance also has a critical domestic dimension. It is precisely seen that a key asymmetry emerges. The war reveals a divergence in societal resilience between the two sides. In the United States, public opinion is increasingly marked by war fatigue and a declining appetite for sustained confrontation. In Iran, by contrast, the conflict has -at least for the time being- generated a degree of psychological consolidation, with segments of society exhibiting resilience and a measure of support for the state. This divergence is likely to shape each side’s capacity for endurance and, in turn, influence their respective leverage at the negotiating table.

Fourth, and perhaps most importantly, the war has expanded the negotiating agenda. Before the war, diplomacy centered largely on the nuclear file. Today, the scope is broader and more complex. Issues of regional security architecture, maritime stability, and energy flows are now explicitly part of the bargaining process. This expansion benefits Iran. By linking multiple issue areas, Tehran increases the number of variables in play –and, with them, its capacity to trade concessions across domains. In effect, Iran is no longer negotiating solely over its nuclear program, but over the stability of a wider regional system.

Taken together, these shifts suggest that the postwar negotiation landscape is less about hierarchical power than about mutual vulnerability. The United States retains overwhelming military superiority. But superiority alone does not determine bargaining outcomes. What matters is how power translates into acceptable costs and manageable risks. In the current context, Washington may find itself negotiating to contain escalation and stabilize markets, while Tehran seeks to leverage precisely those pressures.

This does not mean that Iran has “won” the war, nor that it now dominates the diplomatic arena. Rather, it points to a more nuanced reality: military outcomes do not map neatly onto bargaining outcomes. Wars generate information. They reveal capabilities, expose limits, and clarify preferences under conditions of stress. In doing so, they reshape the expectations and fears that underpin negotiation.

The February 28 war has done exactly that. It has demonstrated that Iran can absorb punishment without immediate collapse, project risk beyond its borders, and do so in ways that affect not only its adversaries but also the broader regional and global economy. These are not markers of military parity. They are indicators of bargaining relevance.

During the negotiations leading up to the war, Trump reportedly asked his envoy Steve Witkoff why Iran had not surrendered despite overwhelming military pressure. The question reflects a deeper analytical blind spot–one that persists today. Why, after weeks of intense bombardment, has the war not produced decisive victory or total surrender? The answer lies less in battlefield dynamics than in a fundamental misunderstanding of coercion.

As Thomas Schelling, the architect of modern coercion theory, famously argued, coercion is inherently difficult even for actors possessing overwhelming military superiority. It operates not primarily through the destruction already inflicted, but through the credible threat of future pain. Its effectiveness depends on preserving that threat. Schelling’s analogy of hostages captures this logic succinctly: hostages represent “the power to hurt in its purest form,” yet once they are killed, the adversary no longer has an incentive to concede. Excessive force, in other words, can undermine coercion itself.

A similar dynamic appears to be unfolding in this war. Prior to the war, the United States possessed both the capacity to hurt Iran and the bargaining leverage that flowed from it. Over time, however, Iran has increased the price of victory for Washington by widening the scope and raising the costs of the war–demonstrating both escalation capacity and a high tolerance for pain. In doing so, it has altered the coercive balance and complicated the United States’ ability to translate military superiority into political outcomes.  In Schelling’s terms, the United States appears to have “killed the hostages,” thereby diminishing its own coercive leverage while Iran has preserved the latent power to hurt that sustains bargaining.