TEMPO.CO, Jakarta - The US on Monday announced what it said would be an "unprecedented" bid to constrict Iran's economy, by targeting its trading partners, as the war in the Middle East continues with no real resolution or progress in sight.
Treasury Secretary Scott Bessent's much-hyped press conference did not include any solid measures or announcements, but he said to expect them to follow fairly rapidly in the course of the week.
He laid out plans for what he called the "economic asphyxiation" of the regime in Tehran, implying this would be achieved in large part via secondary sanctions on Iran's trading partners.
"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."
What did Bessent say about the plans?
Bessent called the program "Operation Economic Outcast" and again sought to liken it to the "Economic D-Day" mentioned last week by US President Donald Trump, an analogy that prompted ridicule because of how poorly it seemed to fit the circumstances.
"In the Second World War, D-Day marked the historic beginning of a campaign with our Allies to target and drive the enemy from its positions, including those in third counties," Bessent said, in an apparent effort to salvage the historical allusion.
It would target Iran "and its enablers," he said.
"Iran now faces a very clear choice, with only two paths before them: Complete global isolation and a subsistence economy, or a path back to normalcy with an opportunity to rejoin the global economy," Bessent said.
He said the Treasury had mapped "every node, every network, every facilitator that Iran has used to smuggle oil and evade sanctions," and said it would now start to "tighten the noose" to constrict "every potential source of revenue that funds the IRGC and the evil Iranian regime."
Carrot and stick both brandished at third countries
There would be a "zero leakage approach," he said, adding that for third parties it was "no longer acceptable to operate in the grey spaces of this conflict."
"The president is making phone calls to world leaders with specific requests to cease their interactions with the regime. We are already seeing results," Bessent said, without elaborating.
"Those who stand with the United States will reap the rewards of our partnership," Bessent said. "Those who tether themselves to the Iranian regime should expect to share in the isolation of a withering regime."
He said the US would issue various countries a defined timeline to cooperate and steps to take, or to face consequences.
How has Iran responded to the new sanctions?
Responding to the latest US sanctions on Monday, Iran's Economy Minister Ali Madanizadeh predicted "another defeat" for Washington, saying Tehran had a "two year plan" to counter the 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."
Over the weekend, the head of Iran's top security body warned that Tehran would see any country's support of the US measures as an "act of war."
Supreme National Security Council leader Mohsen Rezaei said Iran would "retaliate in a seismic manner" to the sanctions by targeting other oil-shipping routes from the Persian Gulf.
"If the economic war continues, not a single drop of oil will be exported, neither through the Strait of Hormuz nor from anywhere in the Persian Gulf," Rezaei said.
Why is the US having to focus on third countries?
Iran has already been living under international sanctions for decades. The US does almost no bilateral trade with Iran and has very little direct economic leverage over it.
Prior to the war, Iran's two biggest trading partners by far were China — arguably the country and entity that has most effectively stood up to past attempts at economic intimidation from the Trump administration — and the United Arab Emirates. The UAE last week announced it was suspending all trade, commercial exchanges and financial transactions with Iran until further notice.
NATO member Turkey and neighboring Iraq both do a substantial amount of business with Iran.
Russia is also a valued trading partner, albeit one with no need of Iranian fuel exports.
Germany is Iran's largest European trading partner, but volumes barely exceeded a billion euros in 2025 (not much more than the US figures) with provisional government figures suggesting the levels will roughly halve to record lows this year amid the war.
Bessent said he would not "name names" when it came to whose cooperation the US would seek or demand.
Ahead of Monday's press conference, China's Foreign Ministry said Beijing was monitoring developments closely and would do what is necessary to protect its rights. The ministry also added that sanctions and pressure tactics do not help resolve problems.
'Economic D-Day'
In a post on X prior to Monday's announcement, Bessent described the sanctions as "the single greatest financial offensive ever marshaled against an adversary."
He said US President Donald Trump had "dismantled Iran's military capabilities," destroyed nearly 100% of its military factories and "buried its nuclear program."
"We are now entering the endgame," he added.
Hours ahead of the announcement on Monday, Trump said Iran was "completely collapsing" in a post on social media.
Last week, the US president announced what he called an "economic D-Day" for Tehran, threatening harsher sanctions targeting not only Iran but also countries that continue to do business with it.
"Our objective is to sever every economic lifeline that sustains the tyrannical regime until Tehran stands alone," Bessent said on Monday.
The current situation in the Iran war
The Middle East war began on February 28 when Israel and the US carried out strikes on Iran, killing Supreme Leader Ayatollah Ali Khamenei. Tehran responded with strikes on energy infrastructure and US bases in the Gulf region.
While the two sides have stopped the bombing, talks to end the conflict have stalled, with control over the Strait of Hormuz remaining a key sticking point. Iran has effectively closed the waterway, crucial for global oil and gas shipments, while the US maintains a blockade of Iranian ports.
Under a memorandum of understanding signed in June, the two sides had 60 days to negotiate an end to the war and reach an agreement on Iran's nuclear program. But that period expired last week with no signs of a deal.
Meanwhile, Pakistan's army chief was due in Iran on Monday as part of efforts to revive diplomatic talks in the conflict.
And on Tuesday, Oman's foreign minister is set to meet his Iranian counterpart to continue talks on the Strait of Hormuz.
