Treasury Secretary Scott Bessent announced plans for a wave of new sanctions Monday aimed at further isolating Iran, after threatening the Islamic Republic with “an economic D-Day.”
The sanctions will target international entities engaged in facilitating Iranian trade related to shipping, oil, crypto, gold and aviation.
Bessent said President Donald Trump was making phone calls to world leaders with “specific requests” to cease trading with the Iranian regime.
Bessent said the U.S. was launching an “economic onslaught” against Iran’s financial connections “around the globe” in order to “sever every economic pipeline” used by Iran “until Tehran stands alone.”
Treasury announced Monday it is sanctioning nearly 60 corporations, individuals and vessels in multiple jurisdictions that it says enable the Iranian regime’s “recklessness.” That list includes multiple Chinese nationals.
China has said it is illegal for its citizens to comply with unilateral U.S. sanctions.
Bessent said the U.S. was engaging in “quiet diplomacy” with Iranian trade partners to warn them of the consequences for continuing to trade with Tehran. Any entity that facilitates money laundering on behalf of Iran will be removed from the U.S. dollar system, he said.
“No one is above the reach of U.S. sanctions,” Bessent said, adding there was now a “cure period” for nations to end the targeted relations with Iran.
Yet Bessent did not lay out any immediate concrete actions against other countries. Markets showed little reaction to Bessent’s remarks.
Iranian officials downplayed the economic threat.
“You will fail this time too,” Iranian Economy Minister Ali Madanizadeh said in response to Bessent’s comments, according to the semiofficial Fars news agency, and added, “The government is fully prepared for this economic war.”
Madanizadeh said that it would not be easy to cut the country off from global economic channels and that Iran would retaliate, according to the semiofficial ISNA news agency.
“If they take any action, they should expect an attack from us,” he said, according to ISNA.
Separately, Iranian President Masoud Pezeshkian said that the U.S. must stop trying to bully Iran.
“America must correct its tone and approach in dealing with Iran, because relying on force and bullying will only complicate the process,” he said, according to the semiofficial Tasnim news agency. “Our nation, relying on its solidarity, will overcome any pressure and threats.”
Pezeshkian made the comments during a meeting on Monday with Field Marshal Asim Munir, the army chief of Pakistan, a key mediator between the U.S. and Iran, according to Tasnim.
After six months of kinetic combat and a U.S. naval blockade of the Strait of Hormuz, the Trump administration has few remaining levers it can use to convince Iran’s major trading partners to materially reduce their economic ties, said Alan Eyre, a distinguished diplomatic fellow at the Middle East Institute.
The White House “seems to think that this announcement in and of itself will cause countries to sever relations with Iran absent any follow-up, which I think is highly unlikely,” Eyre told NBC News.
The U.S. has for decades imposed direct sanctions on Iran and businesses involved in prohibited activities like weapons procurement. But Iran has, in many cases, successfully evaded the sanctions by setting up new front companies.
Bessent promised Sunday to launch “the single greatest financial offensive ever” in an op-ed in the Financial Times.
“The world should understand that our objective is to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone,” he wrote, adding that any country partnering with Iran would also be financially isolated.
Monday’s actions are designed to target “secondary” countries whose trade and business relations still benefit Iran. Ahead of the announcement, the United Arab Emirates, a close U.S. ally whose leadership has forged close ties with the Trump administration, announced it was ending all trade relations with Iran.
Experts say the success of Bessent’s announcement will hinge on whether Iran’s most powerful trading partners — China, India and Russia — decide the U.S. threats are credible.
“If you’re a country like Russia or China, you see Iran as ally, and you’re not just going to suddenly stop trading with them — that damages Moscow’s credibility in eyes of their friends around the world,” said Andrew Gawthrope, a university lecturer at the University of Leiden specializing in U.S. foreign policy.
“There’s just not much the U.S. can do to these countries to make them go along with this,” he said.
It’s been nearly six months since the U.S. and Israel attacked Iran on the premise of preventing it from obtaining a nuclear weapon.
The U.S. has racked up its own costs. Defense Secretary Pete Hegseth said last month that the war has cost the U.S. $37.5 billion, though estimates put the all-in economic impact at as much as $150 billion. Moody’s Analytics chief economist Mark Zandi told NBC News last month he estimated the war has cost the average U.S. household more than $1,200 in higher energy and grocery costs alone.
Despite the new economic measures announced Monday, Hegseth did not rule out further military action.
“If we need to use kinetic strikes, we’ll use them. If Iran is foolish enough to overplay their hand or mess with the American military, we’ll do what we need to do,” Hegseth told reporters Monday. “But economic pressure, we know, hurts them the most right now.”
“By no means are we foreclosing using kinetic strikes anywhere in the Strait of Hormuz or around Iran.”
The war has also become a political liability for Trump ahead of November’s midterm elections, with his approval rating dropping to its lowest level of either of his presidential terms. Economists say that in addition to higher gas prices, the war has also helped contribute to the current turmoil in the bond market that’s led to extraordinary intervention by the Treasury Department.
While Bessent was speaking Monday, Mohammad Bagher Ghalibaf, the speaker of Iran’s Parliament who until recently had been leading Iran’s negotiation team to end the war, took to X.
“Americans know that no one buys their bombast; the United States is not in an economic position to further restrict its relations with other countries,” he wrote. “Iran’s trading partners, both in the media and through messages sent to us, have made it clear that they don’t take these statements into account anywhere.”
Ahead of the speech, the country’s Deputy Foreign Minister Kazem Gharibabadi also posted on X to question whether Bessent’s plan was “an admission of America’s defeat?”
Referencing previous American claims that Iran’s military capabilities had been destroyed, he said, “Dealing with this very Iran has required the ‘largest financial offensive in history’ and the mobilization of ‘all of America’s institutions and authorities.’”
The head of Iran’s Central Bank, Abdolnaser Hemmati, told the semiofficial Tasnim news agency that the U.S. had “done everything it could in terms of sanctions up to now and the recent claims do not introduce any new restrictions or additional pressure.”
Iran had been anticipating “difficult conditions” since the war began in February “and began stockpiling foreign currency,” he said in comments that were published ahead of Bessent’s announcement.
This had enabled the country “to give a firm commitment that we would provide the foreign currency needed for essential goods and medicine,” he said.
In Tehran’s sprawling Grand Bazaar, long a center of conservatism in Iranian politics and still an economic force within the country, there was a heavy police presence and some expressed frustration at the value of Iran’s currency, the rial.
With gas prices on the rise and long lines reported at some gas stations, authorities in the country appeared concerned that protests could break out.
Violent demonstrations left thousands dead in January and thousands were arrested by the country’s hard-line regime after people took to the streets to call for an end to the country’s theocratic rule.
While President Donald Trump hoped for people to rise up against the country’s hard-line rulers early on in the war, Iran’s authoritarian government appears to have tightened its grip on power since the start of the war.
Iran’s supreme leader, Ayatollah Ali Khamenei, was killed at the start of the war along with several other senior officials. Now, his son and successor Mojtaba Khamenei appears to be equally hard-line, as he has elevated a group of veteran hard-liners from the country’s security and military establishment.
