‘Economic asphyxiation’: US Treasury chief announces new sanctions campaign against Iran
Times of Israel · LC · trust 62/100
The US on Monday announced an expansion of secondary sanctions it hopes will “sever every economic lifeline” sustaining Iran, as President Donald Trump’s administration struggles to resolve an unpopular war that has pushed energy prices higher.
Treasury Secretary Scott Bessent unveiled what he described as an “economic D-Day” that aims to give a final warning to countries to cut their business ties with Iran or risk having key companies and entities cut off from the dollar-based financial system.
“We are launching an economic onslaught against Iran’s financial connections around the globe. Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent said at a press conference.
Bessent laid out plans for the “economic asphyxiation” of Iran, warning of dire consequences for countries that decline to join the pressure campaign.
Bessent’s address comes almost six months into a war on Tehran that has ground to a stalemate, with stalled peace talks and Iran thwarting most traffic through the crucial Strait of Hormuz.
“Around the globe, our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone,” Bessent told a press conference.
“We are going to hold everyone accountable, and this is economic asphyxiation of this regime.”
He added that countries not joining US sanctions would “share in the isolation” of Iran, and noted that Trump is making phone calls to world leaders with requests to stop their interactions with Tehran.
The US Treasury Department said Monday that it has “issued determinations against five critical sectors — digital assets, technology, gold, aviation, and shipping — that the Iranian regime uses to try to prop up its failing economy.”
Bessent, meanwhile, vowed that any entity “that facilitates money laundering on behalf of Iran will be removed from the US dollar system.”
He said secondary sanctions in the pipeline aim to block all potential sources of revenue for Iran, telling nations to cut economic ties to Tehran or face US retaliation.
Bessent added that it’s “no longer acceptable to operate in the gray spaces” of the conflict.
The Treasury secretary did not name countries that could face potential secondary sanctions from the United States, but China, Turkey and the United Arab Emirates are Iran’s largest trade partners.
“Let there be no ambiguity as to the position of the United States,” Bessent said. “An economic engagement of any kind with this murderous regime will expose those responsible to the full reach of American power.”
Asked if Chinese banks dealing with Iran could be targeted, Bessent said that “no one is above the reach of US sanctions.”
China has for several years been the biggest buyer of Iranian oil and Washington has intensified its efforts to clamp down on Chinese purchases, but has so far stopped short of designating larger Chinese banks that may be facilitating the oil trade.
Chinese leader Xi Jinping is expected to visit the US next month.
The Treasury chief earlier declared that an “economic D-Day” had begun against Tehran, in a column for the Financial Times.
Asked by a reporter why Washington was not taking immediate action against Tehran’s financial partners, the secretary said he wanted countries to shift away from Iran before it was too late.
“Why would I want to blow up the global financial system?” Bessent said. “We believe that it is important to level-set and give people a cure period.”
But, he added: “They should know that that will move very quickly and that we are serious. Secondary sanctions are a very powerful tool.”
The UAE announced last week that it was suspending all trade, commercial exchanges, and financial transactions with Iran until further notice.
“I am confident the president, as you all know, is quite persuasive,” Bessent said.
Bessent said that Treasury and State Department officials are following up with calls and visits with officials from countries and entities the US wants to see take action and laying out “exactly what we expect and the timelines.”
Responding to Bessent, Iranian Economy Minister Ali Madanizadeh predicted “another defeat” for the United States, saying the Islamic Republic had a “two-year plan” to counter the new sanctions.
“They have done everything they could to test the determination of the Iranian people and the country’s officials, but they have failed every time. It seems they wished to suffer yet another defeat,” Madanizadeh told state television.
“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,” he added.
The sanctions announcement came as the Iranian currency hit a new record low, dropping to 2.02 million rials to the US dollar as trading opened on informal currency markets.
Iran’s official Central Bank rate stands at around 1.5 million rial to the dollar, but the informal rate is what most Iranians pay.
The currency had already been under pressure before the US and Israel attacked Iran on February 28, with double-digit inflation and negative growth, but has been hitting new record lows as nearly six months of war have taken an even greater toll.
“You justly exact a steep price from that cruel dictatorship and from those who assist its continued aggression,” Prime Minister Benjamin Netanyahu said in a statement Monday praising the new sanctions.
The US-Israeli campaign was launched to degrade the Islamic Republic’s military capabilities, distance threats posed by Iran — including its nuclear and ballistic missile programs — and “create the conditions” for the Iranian people to topple the regime, Israeli leaders have said.
While heavy fighting has subsided, diplomatic efforts to end the war have stalled and oil and raw material shipping through the Strait of Hormuz remains blocked, keeping energy prices elevated. US Defense Secretary Pete Hegseth stressed on Monday…
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