October 1st, 2026: U.S. Responds To Iran’s Latest Peace Proposal & U.S. Troops Leave Iraq

Mike Baker (0:12)

It's Thursday, the 1st of October. Look at that, a brand new month. Can Christmas tunes be far away? I don't think so. Welcome to The President's Daily Brief. I'm Mike Baker, your eyes and ears on the world stage, and still on the road, still in my posh digs somewhere in London. All right, let's get briefed. First up, the diplomatic channel with Iran reportedly remains open, with Qatar carrying messages between both sides, even as the US rolls out another round of sanctions. I know, it's like Groundhog Day, but with a repressive Iranian regime. If Paxitani Phil sees his shadow, we get six more weeks of optimistic talk about some type of negotiations that might be underway.

Later in the show, US forces have left Iraq after more than two decades, raising new questions about whether Iran-backed militias or ISIS could exploit the security vacuum. Well, let me clear up that mystery. Yes, of course, Iran-backed militias and ISIS will exploit that security vacuum. I am sorry to spoil the suspense. Plus, Pakistan says it will defend Saudi Arabia against the Houthis by quote, whatever means are available, raising the prospect that Islamabad could be drawn directly into the fight. And in today's Back of the Brief, Britain says a Beijing Research Institute is secretly serving as a front for Chinese intelligence. Oh, say it ain't so. And for that, I declare today's Back of the Brief the winner of this week's, possibly this month's, PDB Statement of the Obvious Award. But first, today's PDB Spotlight.

Despite President Trump publicly rejecting Iran's latest peace proposal, some folks are saying that the diplomatic channel between Washington and Tehran is still open. Iranian Foreign Minister Abbas Araghchi has now received, reportedly, formal US feedback on Tehran's seven-day trust-building plan, is that what they're calling it, through Qatari mediators. And that is about as moronic a name for what you might call a plan between the US and Iranian regimes as you could conjure up a seven-day trust-building plan. According to Reuters, Iraqi received the response in Doha on Tuesday, and was expected to take it back to Tehran for discussions with Iran's leadership, whomever that might be. The exact contents of the American response have not been made public, but we do know something important about where the talks stand, or supposedly stand. The main disagreement is reportedly over sequencing. In other words, the two sides may not be arguing over every component of the plan, so much as the order in which those steps would happen. Iran wants to know what he gets and when. Washington wants to know what the regime is prepared to do first. Iran's proposal calls for a seven-day trust building period, I just can't say that often enough, designed to move both sides back toward an expanded version of the Memorandum of Understanding, reached in June. Well, that worked out well. That earlier framework briefly reduced hostilities and included provisions involving the Strait of Hormuz and Iran's nuclear program, although that particular provision was simply, supposedly, to say that at some point, both sides would talk about Iran's nuclear program. The latest Iranian proposal again centers on reopening the Strait of Hormuz and restoring normal maritime traffic if certain conditions are met. Tehran has also been seeking relief from the US naval blockade, access to frozen Iranian funds, and waivers that would allow some oil sales to resume. President Trump publicly rejected those terms last week, but that was publicly. Apparently, the rejection did not reportedly end the talks.

Qatar kept moving messages between Washington and Tehran, and the US ultimately sent Iran a formal response. So the public answer to Tehran's original offer was no, but behind the scenes, the negotiations kept moving. Iran wants economic relief before giving up some of the leverage that it still has, particularly, of course, around the waterway. Washington wants Iran to take concrete steps first, especially on the nuclear side, before easing the existing pressure. For now, there is still no agreement. And while that effort is moving through Qatar, Washington is doing something else at the same time. They're increasing the pressure on the regime. The Treasury Department announced another round of sanctions Tuesday, targeting 10 individuals and entities in Iran, Hong Kong and Pakistan, accused of helping Iran procure weapons and military components. But it does make you wonder, if sanctions work, and they certainly appear to work when combined with actual consequences, why not just unleash them all at once?

The sanctions are part of what the administration calls Operation Economic Outcast to campaign, designed to cut Iran off from the financial and commercial networks that keep its military supplied. US officials say the latest targets helped Iran's Defense Ministry obtain components used in weapons programs, including missiles and drones. The goal is, of course, to make it harder and more expensive for the regime to replace what it's lost over the course of this war. And the new sanctions are landing at a difficult time for the Iranian regime and their economy. The real fell to a new record low this week, with more than two and a half million reals trading for one US dollar. Iran's economy was already under heavy sanctions and strained before the war, but the combination of new sanctions, the US naval blockade and disruption to oil exports has driven that pressure even higher.