Treasury Secretary Scott Bessent announced a new round of sanctions aimed at Iran and warned every country that does business with the Islamic Republic to sever those financial ties or face retaliation from the United States.
US President Donald Trump's pledge last week to unleash an "economic D-Day" against Tehran turned out to be new warnings to cut off Iran from the rest of the global economy. Asked why the US was not imposing secondary sanctions on Iran's trading partners, Bessent told reporters he wanted countries to have an opportunity to shift away from Iran before it was too late.
"Why would I want to blow up the global financial system?" Bessent said.
The Trump administration is struggling to find an off-ramp nearly six months into an unpopular war with an increasingly obstinate Iran. Washington had promised new sanctions would put even more pressure on an Iranian economy already battered by previous penalties and a US naval blockade.
But the announcement on 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.
"We are level-setting with every country to tell them our expectations. We know who they are. They know who they are," Bessent said. "So when the hammer of US Treasury actions falls upon them, they will have no one to blame but themselves."
Blanket threat to all nations in Trump's 'economic D-Day' against Iran - Watch on TVNZ+
Dubbing the campaign Operation Economic Outcast, Bessent said Trump has been "making phone calls to world leaders with specific requests to cease their interactions" with Iran and has already seen results.
The UAE announced last week that it was suspending all trade, commercial exchanges and financial transactions with Iran until further notice after a reported missile attack on the Gulf country. Bessent said the UAE decision was "not a coincidence".
Shortly before the announcement, Iranian parliamentary Speaker Mohammad Bagher Qalibaf said the US is not in an economic position to further restrict Tehran's relations with other countries.
"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," Qalibaf, who has been Iran's lead negotiator over the past six months, posted on X.
Bessent pressed on what the new campaign means for China
Asked whether the US would target China, Bessent said that "no one is above the reach of US sanctions," despite the fragile trade truce in place between the world's two largest economies.
"If they facilitate transactions and are part of the ecosystem that turns Iranian oil into money, into repression, they will be targeted," he added.
Experts say the US is likely to carefully calibrate its actions on China, just a month before Chinese leader Xi Jinping is expected to visit the US.
How much the announcement matters "depends on the aggressiveness with which President Trump is willing to enforce it," said Ali Wyne, senior research and advocacy adviser for US-China relations at the International Crisis Group.
"Thus far, despite threatening severe economic consequences for countries that do business with Iran, he has largely given China a pass."
The Treasury Department said Monday that it was imposing sanctions on nearly 60 Iran-linked entities, accusing them of roles in Iran's nuclear and missile programmes, cyber activities and oil shipments.
That includes Hong Kong-based Sweet Ocean Industrial Limited and associated people and businesses, which were accused of helping Iran acquire sensitive goods such as laser optics equipment. Also penalised was China-based Shenzhen Huamei, which is a service provider for the Iran-based logistics company BRE Line, as well as BRE Line's branch in Hong Kong, for allegedly supporting the missile and nuclear programmes.
Iranian currency falls to a record low
Hours before Bessent's announcement, Iran's currency hit a record low.
The rial dropped to 2.02 million to the US dollar as trading opened on currency markets. Iran's official Central Bank rate stood at around 1.5 million rials to the dollar, but the market rate is what most Iranians pay.
The currency had already been under pressure before the US and Israel attacked Iran on February 28, as Iran faced double-digit inflation and negative growth. The rial has repeatedly hit new lows as nearly six months of war have taken an even greater toll.
Iranians find daily staples increasingly unaffordable. Since the war began, rice is up some 60% and beef prices are more than 150% higher. The International Monetary Fund forecasts that gross domestic product will contract more than 5%.
Still, economic pressure has not yet translated into political pressure. Iran retains a key strategic advantage: Its attacks and threats on ships in the Strait of Hormuz have brought traffic in the vital waterway to a near halt, damaging the world economy and heaping pressure on US President Donald Trump ahead of congressional elections.
The war, as a result, has devolved into a fight over who controls the strait, through which a fifth of the world's traded oil transited before the conflict. Iran is now refusing to fully reopen it unless it can charge ships.
Iran and Oman, which is on the opposite side of the strait, are reportedly in the final stages of agreeing on a plan for joint management of the waterway. Oman's foreign minister is set to visit Iran on Tuesday.
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