Scott Bessent, the United States Treasury Secretary, unveiled an aggressive strategy aimed at economically isolating Iran, escalating the US stance with enhanced secondary sanctions. He issued stark warnings to nations that opt not to align with this initiative.
On Tuesday, this announcement was made half a year into a conflict with Iran that has reached a standstill. The impasse is marked by stalled peace negotiations and Iran’s blockade of most traffic passing through the vital Strait of Hormuz.
Previously, Bessent described this move as an “economic D-Day” targeting Iran, though he did not specify which other nations might be involved, nor did he provide a detailed timeline.
Addressing the press, Bessent stated, “Our mission worldwide is to cut off every financial support network that enables this oppressive regime, until Tehran finds itself completely isolated.”
He further emphasized, “Our aim is clear — to hold every nation accountable, paving the way for economic suffocation of this regime.”
He added that countries not joining US sanctions would “share in the isolation” of Iran, and noted that US President Donald Trump was making phone calls to world leaders requesting they stop interactions with Iran.
The US treasury department said expanded secondary sanctions would target Iran’s digital assets, technology, gold, aviation and shipping sectors.
It also issued new sanctions against 60 individuals, companies and vessels that allegedly aid Iran in oil revenue generation, weapons procurement and cyber operations.
The sanctions hit entities around the world, including in the United Arab Emirates, Hong Kong, China, Singapore and in Europe.
Bessent vowed that any entity “that facilitates money laundering on behalf of Iran will be removed from the US dollar system”.
Iran had been dismissive of the threat of additional sanctions, and on Tuesday its economy minister predicted “another defeat” for the US on the economic front.
“We’ve been waiting for these plans for a long time, and the government is and was ready and has a two-year plan to manage these events,” Ali Madanizadeh said.
In a post before the announcement, Iran’s deputy foreign minister Kazem Gharibabadi said the latest US threats were an admission of military defeat.
Gharibabadi asked why, if the US had achieved its goals, “there is a need for ‘the largest financial invasion in history’ and the mobilization of ‘all institutions and powers’ of the United States!
“Is this a victory or an admission of America’s defeat?”
Decades of sanctions
Iran has weathered decades of crushing international sanctions, and before the war it continued to export millions of barrels of oil, mostly to China, and to evade sanctions through complex international financial networks.
Asked on Tuesday if Chinese banks would be targeted by the new sanctions, Bessent said “no one is above the reach of US sanctions”.
The US naval blockade of Iran has seen its oil exports via the Strait of Hormuz fall from two million barrels a day pre-war to just 0.4 million by mid-August, according to maritime tracker Kpler.
For ordinary Iranians, the standoff is likely to bring only more economic pain after years of rampant inflation, which in December and January fuelled massive anti-government protests.
Sarah Hassanbeigi, a 32-year-old pharmacist in Tehran, said: “I don’t think people can really take this much longer.”
The US announcement on Tuesday also suspended sanctions exemptions for payments to and from Iran related to the US educational system.
Pakistani delegation
Last week, Iranian President Masoud Pezeshkian, considered a relative moderate, said Iran should “bring the war to an end now as we are in a position of power”.
That followed Supreme Leader Mojtaba Khamenei appointing hardliners to key security positions.
On Monday, Pakistan’s army chief Asim Munir — a key mediator in the conflict — visited Iran and met separately with Iran’s president, chief negotiator and the head of its highest national security body.
The meetings took place after Trump spoke last week with Munir, a US source familiar with the matter told the Agence France-Presse news agency earlier on Monday.
Pakistan was a leading mediator in talks that helped secure an April ceasefire that later fell apart. It is also a major trading partner of Iran, possibly opening it up to the threat of the new sanctions.
Oman’s foreign minister was due in Iran on Tuesday, as the two countries seek a deal on regulating passage through Hormuz.