Barbara Slavin explains how U.S. Iran policy hurts Iranians and the U.S. at the same time. She concludes with this observation:

U.S. accession to the JCPOA provided a basis and a diplomatic channel for Washington to aggressively pursue those other goals. But having quit the nuclear deal despite Iranian compliance, the Trump administration cannot realistically expect more concessions from Tehran on other issues.

Unrealistic expectations are the only kind that the Trump administration seems to have when it comes to diplomacy with Iran and North Korea. There is certainly nothing realistic about the concessions that the U.S. is seeking from Iran. In addition to demanding the end of their nuclear program, Pompeo called for the cessation of all Iranian involvement throughout the region. According to this report, Bolton has described the demands in his characteristically blunt and undiplomatic fashion:

Bolton told Europeans that Washington was looking for Iran’s “unconditional surrender,” harkening back to demands on Iran made by Pompeo during a speech in late May.

The Trump administration line is that they want Iran to behave like a “normal country,” but no normal country would tolerate having its foreign policy and internal affairs dictated to it by a foreign government. Any state would reject a demand for their unconditional surrender, and the only way that the U.S. has ever forced other states to agree to such extreme terms is by defeating them in war. Needless to say, war with Iran would be ruinous for the people of Iran and it would be very costly for the U.S., but as long as U.S. Iran policy is defined by reflexive hostility and unreasonable demands war becomes steadily more likely.

The next step towards that war could come in the form of labeling the Islamic Revolutionary Guard Corps (IRGC) as a terrorist group:

The Trump administration is weighing whether to label a powerful arm of Iran’s military as a terrorist group, part of an effort to use every possible tool in the box to pressure Tehran.

Labeling the IRGC as a terrorist group potentially increases the risk to U.S. military personnel in the region, but it would also make it more difficult for foreign companies to do business in Iran. Further choking off trade and investment in Iran isn’t going to produce the change in regime behavior that the administration wants, but it is going to exacerbate the Iranian people’s economic woes. Hard-line punitive policies always do more to hurt the people in a targeted country than they hurt the regime, and by putting Iran under siege it strengthens the hand of their hard-liners.