Treasury Secretary Scott Bessent announced a new round of U.S. economic sanctions on Iran on Monday and warned every country that does business with the Islamic Republic to sever those financial ties or face retaliation from the United States. That’s the machinery of empire speaking plainly: cut off trade, obey the boss, or get hit next.
Bessent said, “We are level-setting with every country to tell them our expectations. We know who they are. They know who they are,” and added, “So when the hammer of U.S. Treasury actions falls upon them, they will have no one to blame but themselves.” He also said Trump has been “making phone calls to world leaders with specific requests to cease their interactions” with Iran and has already seen results. Bessent said the UAE decision to suspend trade, commercial exchanges and financial transactions with Iran until further notice was “not a coincidence.”
Who Gets Squeezed
The Treasury Department said the new sanctions target “a network of brokers, companies, and shadow fleet vessels operating across the United Arab Emirates (UAE), Hong Kong, China, Singapore, Switzerland, Europe, and other regions to transport Iranian oil and channel revenue to the Islamic Revolutionary Guard Corps-Qods Force (IRGC‑QF) and other regime elements.” Bessent said the administration’s objective is to “sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.” In an editorial for the Financial Times published overnight, he wrote, “our objective is to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone,” and said countries that still trade with Iran should “consider the consequences of doing so.”
The administration said the measures are meant to block all potential sources of revenue for Iran. The announcement Monday provided little detail and did not name which countries could face secondary sanctions. China, Turkey and the United Arab Emirates are Iran’s largest trade partners. Bessent said the new warnings were issued after Trump’s pledge to unleash an “economic D-Day” against Tehran.
NPR described the move as “economic D-Day” and said the administration is calling the measures “Operation Economic Outcast.” NPR also reported that the sanctions are focused on putting more pressure on the countries and governments — not just the businesses — that host the entities providing cashflow for Iran. The report said Bessent criticized China last week for historically buying about 90% of Iran’s oil.
What the Power Brokers Say
Alan Eyre, a former American diplomat who was part of the U.S. negotiating team over Iran’s nuclear program until 2015, told NPR’s Emily Feng that the U.S. has already targeted “the low-hanging fruit, the mid-hanging fruit, the high-hanging fruit, the tree,” and that “there are no new sanctions that are effective.” That’s the kind of line that slips out when the sanctions regime has already chewed through most of what it can reach.
Iran’s new security chief, Mohsen Rezaei, said in an interview on state TV over the weekend that Iran would retaliate in a “seismic manner” to Trump’s latest attempt at economic warfare. Rezaei, a hard-liner who used to lead Iran’s paramilitary Revolutionary Guard, is now a military adviser to Iranian Supreme Leader Mojtaba Khamenei. He warned Gulf states that any countries partnering in the new economic restrictions would be considered an enemy of — and a target for — Iran.
Since the U.S. and Israel launched their war on Iran nearly six months ago, Iran has attacked U.S. bases in Jordan and Gulf countries including the United Arab Emirates, Kuwait and Saudi Arabia. Several have led to serious injuries and fatalities. Rezaei said Iran would retaliate by further targeting oil tankers transiting the Persian Gulf on the Omani side of the Strait of Hormuz, warning that “not even a single drop of oil will leave the region.”
Iran is not currently interfering in those routes, but such actions could further hamper oil supplies. Energy exports from the Gulf region have already suffered the biggest disruption in their history because of the war and Iran’s closure of the Strait of Hormuz. Gulf countries that invested billions in pipelines that can help avoid the strait have not yet commented on the U.S. plans for fresh sanctions.
Who Pays at the Bottom
Iran has weathered U.S. sanctions for almost half a century, since the Islamic Revolution of 1979, with ordinary Iranians bearing the brunt of the economic pain. The Iranian economy was already struggling when the U.S. and Israel launched the war against Iran in February, with double-digit inflation and currency devaluation. According to the Iranian government’s Statistical Center of Iran, inflation is now at almost 90%.
In anticipation of the fresh sanctions, Iran’s rial currency plunged, hitting more than 2 million rials to the dollar, according to online currency exchange trackers. The AP reported that the rial dropped to 2.02 million to the U.S. dollar as trading opened on currency markets, while Iran’s official Central Bank rate stood at around 1.5 million rial to the dollar. The AP said the currency had already been under pressure before the U.S. and Israel attacked Iran on Feb. 28, as Iran faced double-digit inflation and negative growth.
The AP also reported that rice is up some 60% and beef prices are more than 150% higher since the war began, and that the International Monetary Fund forecasts gross domestic product will contract more than 5%. It said economic pressure has not yet translated into political pressure, and that Iran retains a key strategic advantage because its attacks and threats on ships in the Strait of Hormuz have brought traffic in the vital waterway to a near halt. The AP said Iran is now refusing to fully reopen the strait unless it can charge ships.
In downtown Tehran, 73-year-old Sadegh Mahmoudi did not hold out hope for a resolution. He joined a line of about a dozen people to purchase U.S. dollars with his remaining savings to hedge against further declines. “There is no hope for a deal and peace,” he said.
Pakistan, which played a key role in brokering a 60-day ceasefire in June, sent a high-level delegation to Iran on Monday to encourage the U.S. and Iran to return to negotiations, two senior officials said. The military confirmed only Field Marshal Asim Munir’s visit, saying it was aimed at de-escalating tensions in the region. Trump spoke with Munir ahead of the army chief’s visit to Iran, according to a person familiar with the discussion. Reuters, citing Pakistani sources, first reported the call.
Munir met Iranian Interior Minister Eskandar Momeni in Tehran, according to the two senior officials. Munir was accompanied by Pakistani Interior Minister Mohsin Naqvi and other officials. Munir was expected to remain in Iran overnight and meet the Iranian president and other senior officials before returning to Pakistan. His previous visit to Tehran in May helped pave the way for a memorandum of understanding signed by the U.S. and Iran in June.
Separately, while the Trump administration steps up sanctions, the United Nations is proposing to be a neutral arbiter to get some goods flowing through the Strait of Hormuz. U.N. Secretary-General António Guterres called on everyone to respect international law and allow civilian trade. “Maritime chokepoints must never become instruments of coercion and the world's food supply must never become the collateral damage of conflicts,” he told reporters in New York on Monday. The U.N. said it is ready to monitor civilian shipping in the strait if countries involved in the conflict agree.